FINMAN RATIOS

Question 1

Return on Sales

Answer 1

Profit / Net Sales

Question 2

Gross Profit Rate

Answer 2

Gross Profit / Net Sales

Question 3

Return on Total Assets

Answer 3

Net Income / Average Total Assets

Question 4

Return on SHE

Answer 4

Net Income / Average SHE

Question 5

Return on Ordinary SHE

Answer 5

(Net Income – Preferred div) / OSC

Question 6

Operating Leverage

Answer 6

Contribution Margin / EBIT

Question 7

Times preffered dividend earned

Answer 7

Profit / Preferred dividend requirement

Question 8

4 Basic Financial Statement Analysis

Answer 8

Horizontal or Comporative Analysis
Vertical or Common - Size Analysis
Trend Analysis
Financial Mix Ratio

Question 9

4 Types of Financial Mix Ratio

Answer 9

Profitability Ratio
Liquidity Ratio
Growth Ratio
Leverage Ratio (Solvency or Stability)

Question 10

Price Earnings Ratio

Answer 10

Market price per share / Earnings per Share

Question 11

Dividend Yield Ratio

Answer 11

Dividend per share / Market Price per share

Question 12

Dividend Payout Rate

Answer 12

Dividend per share / Earnings per Share

Question 13

Book Value per Share

Answer 13

SHE / Average shares outstanding

Question 14

Operating Turnover

Answer 14

Collection Period + Inventory days

Question 15

Inventory Turnover

Answer 15

Cost of Goods Sold / Average Inventory

Question 16

Inventory Days

Answer 16

365 days / Inventory Turnover

Question 17

Receivable Turnover

Answer 17

Net Credit Sales / Average trade receivable

Question 18

Collection Period

Answer 18

365 days / Receivable turnover

Question 19

Payable Turnover

Answer 19

Net Credit Purchases / Average trade payables

Question 20

Payable days

Answer 20

365 days / Payable Turnover

Question 21

Materials Turnover

Answer 21

Material used / Average materials inventory

Question 22

Work in Process Turnover

Answer 22

CGM / average WIP inventory

Question 23

Finished Goods Turnover

Answer 23

COGS /average finished goods inventory

Question 24

Cash Turnover

Answer 24

Cash Operating Expense / Average cash balance

Question 25

Days to Pay Operating Expense

Answer 25

365 days / Cash Turnover

Question 26

Working Capital Turnover

Answer 26

Net Sales / Average Working Assets

Question 27

Working Capital

Answer 27

Current Assets - Current Liabilities

Question 28

Current Ratio or Working Capital Ratio

Answer 28

Current Assets / Current Liabilities

Question 29

Assets Turnover

Answer 29

Net Sales / Average Total Assets

Question 30

Current Assets Turnover

Answer 30

Net Sales ( excluding dep and amort) / Ave Current Assets

Question 31

Quick Asset Ratio

Answer 31

( Cash + Market + Securities ,AR) / Current Liabilities

Question 32

Defensive – Interval Ratio

Answer 32

(Cash + Marketable Securities + AR / Average Daily Expenditure )

Question 33

Earnings per Share (EPS)

Answer 33

(Profit-Preferred Dividend)/Ave CS Outstanding

Question 34

Operating Cycle

Answer 34

Days to Sell Inventory + Collection Period

Question 35

Net Cash Cycle / Cash Conversion Cycle

Answer 35

Inventory days + Collection Period - Payable Days

Question 36

Average

Answer 36

Beginning + Ending Bal / 2 Or Previous + Current Bal / 2

Question 37

Debt to Equity Ratio

Answer 37

Total Debt / Net SHE

Question 38

Debt to Assets Ratio

Answer 38

Total Debt / Total Assets

Question 39

Equity Ratio or Equity Rate

Answer 39

Net SHE / Total Assets

Question 40

Equity Multiplier

Answer 40

Total Assets / Net SHE

Question 41

Times Interest earned

Answer 41

EBIT / Interest Expense. EBIT = OPEX

Question 42

*Financial Leverage

Answer 42

*EBIT / (EBIT – Int Exp – Preferred Div Before tax

Question 43

Total Leverage

Answer 43

**Degree of operating leverage * Degree of financial leverage

Question 44

Fixed Charges rate

Answer 44

Cash flows b4 fixed charges / Total fixed charges

Question 45

Total asset to total liabilities ratio

Answer 45

Total Assets / Total Liabilities

Question 46

NCA to NCL ratio

Answer 46

NCA / NCL