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FAR to proof > Financial Statement Analysis > Flashcards

Financial Statement Analysis Flashcards

1
Q

How do you calculate Working Capital?

A

Currents Assets - Current Liabilities

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2
Q

How do you calculate the Current Ratio?

A

Currents Assets / Current Liabilities

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3
Q

How do you calculate the Quick Ratio (acid test)?

A

(Cash + Accounts Receivable + Marketable Securities) / Current Liabilities

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4
Q

How do you calculate the Receivables (A/R) Turnover Ratio?

A

Net Credit Sales / Average (beginning and ending) Accounts Receivable

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5
Q

How do you calculate the Current cash debt coverage ratio?

A

Net cash provided by operating activities / Average Current Liabilities

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6
Q

How do you calculate the Average Collection Period (Number of Days’ Sales in Average Receivables)? (both formulas)

A

365 / Receivables Turnover -OR-

Average Receivables / Daily credit sales

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7
Q

How do you calculate Inventory Turnover?

A

COGS / Average Inventory

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8
Q

How do you calculate Number of Days’ Supply in Inventory?

A

365 / Inventory Turnover

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9
Q

How do you calculate the Length of the Operating Cycle?

A

Number of days’ sales in average receivables + Number of days’ supply in average inventory

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10
Q

How do you calculate the Asset Turnover Ratio?

A

Net Sales / Average Total Assets

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11
Q

How do you calculate the Profit Margin on sales?

A

Net income / Net sales

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12
Q

How do you calculate Return on assets?

A

Net income / Average total assets

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13
Q

How do you calculate Return on (Common) Equity?

A

(Net income - preferred dividends) / Average common stockholders’ equity
Note: Avg. CSE = Common Stock + Retained Earnings

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14
Q

How do you calculate Earnings per share (EPS)?

A

(Net income - preferred dividends ) / Weighted shares outstanding

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15
Q

How do you calculate the Price-earnings ratio?

A

Market price of stock/earnings per share

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16
Q

How do you calculate the Dividend Payout Ratio? (both formulas)

A

Dividends per common share / EPS -OR-

Cash dividends / Net income

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17
Q

How do you calculate the Debt to Equity Ratio?

A

Total Liabilities / Stockholders’ Equity (Net Assets)

18
Q

How do you calculate the Debt to Total Assets Ratio?

A

Total Liabilities / Total Assets

19
Q

How do you calculate the Times Interest Earned Ratio?

A

EBIT / Interest Expense

20
Q

How do you calculate Book value per common share?

A

Common stockholders’ equity / number of common shares outstanding

21
Q

Currents Assets - Current Liabilities equals what formula?

A

Working Capital

22
Q

Currents Assets / Current Liabilities equals what formula?

A

Current Ratio

23
Q

(Cash + Accounts Receivable + Marketable Securities) / Current Liabilities equals what formula?

A

Quick Ratio (acid test)

24
Q

Net Credit Sales / Average (beginning and ending) Accounts Receivable equals what formula?

A

Receivables (A/R) Turnover Ratio

25
Q

Net cash provided by operating activities / Average Current Liabilities equals what formula?

A

Current cash debt coverage ratio

26
Q

365 / Receivables Turnover equals what formula?

A

Average Collection Period (Number of Days’ Sales in Average Receivables)

27
Q

Average Receivables / Daily credit sales equals what formula?

A

Average Collection Period (Number of Days’ Sales in Average Receivables)

28
Q

COGS / Average Inventory equals what formula?

A

Inventory Turnover

29
Q

365 / Inventory Turnover equals what formula?

A

Number of Days’ Supply in Inventory

30
Q

Average Collection Period (Number of days’ sales in average receivables) + Number of days’ supply in average inventory equals what formula?

A

Length of the Operating Cycle

31
Q

Net Sales / Average Total Assets equals what formula?

A

Asset Turnover Ratio

32
Q

Net income / Net sales equals what formula?

A

Profit Margin on sales

33
Q

Net income / Average total assets equals what formula?

A

Return on assets

34
Q

(Net income - preferred dividends) / Average common stockholders’ equity equals what formula?

A

Return on (Common) Equity

35
Q

(Net income - preferred dividends ) / Weighted shares outstanding equals what formula?

A

Earnings per share (EPS)

36
Q

Market price of stock/earnings per share equals what formula?

A

Price-earnings ratio

37
Q

Dividends per common share / EPS equals what formula?

A

Dividend Payout Ratio

38
Q

Cash dividends / Net income equals what formula?

A

Dividend Payout Ratio

39
Q

Total Liabilities / Stockholders’ Equity (Net Assets) equals what formula?

A

Debt to Equity Ratio

40
Q

Total Liabilities / Total Assets equals what formula?

A

Debt to Total Assets Ratio

41
Q

EBIT / Interest Expense equals what formula?

A

Times Interest Earned Ratio

42
Q

Common stockholders’ equity / number of common shares outstanding equals what formula?

A

Book value per common share

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