Formulas Flashcards
Receivables Turnover
annual sales
= —————————-
average receivables
Days of Sales Outstanding
365
= —————————–
receivables turnover
Inventory Turnover
cost of goods sold
= ——————————–
average inventory
Days of Inventory On Hand
365
= —————————–
inventory turnover
Payables Turnover
purchases
= ——————————
average trade payables
Number of Days of Payables
365
= —————————
payables turnover ratio
Total Asset Turnover
revenue
= ————————-
average total assets
Fixed Asset Turnover
revenue
= ———————————–
average net fixed assets
Working Capital Turnover
revenue
= ——————————–
average working capital
Current Ratio
current assets
= ———————————–
current liabilities
Quick Ratio
cash + marketable securities + receivables
= ————————————————————————
current liabilities
Cash Ratio
cash + marketable securities
= ——————————————————-
current liabilities
Defensive Interval
cash + marketable securities + receivables
= ——————————————————————–
average daily expenditures
Cash Conversion Cycle
(days sales outstanding) + (days of inventory on hand) - (number of days of payable)
Debt-to-Equity
total debt
= ———————————
total shareholders’ equity
Debt-to-Capital
total debt
= ——————————————————–
total debt + total shareholders’ equity
Debt-to-Assets
total debt
= ——————————–
total assets
Financial Leverage
average total assets
= ——————————————–
average total equity
Interest Coverage
earning before interest and taxes
= ————————————————————–
interest payments
Fixed Charge Coverage
earnings before interest and taxes + lease payments
= ——————————————————————————
interest payments + lease payments
Net Profit Margin
net income
= ——————–
revenue
Gross Profit Margin
gross profit
= —————————–
revenue
Operating Profit Margin
operating income
= ——————————–
revenue
= EBIT
———————–
revenue
Pretax Margin
EBT
= ——————–
revenue
Return on Assets
net income + interest expense (1- tax rate)
= ——————————————————————-
average total assets
Operating Return on Assets
operating income
= ————————
average total assets
EBIT = ------------------- average total assets
Return on Total Capital
EBIT
= ——————————–
average total capital
Return on Equity
net income
= ————————
average total equity
Return on Common Equity
net income - preferred dividends
= ——————————————————
average common equity
FCFF
xxx
FCFE
cash slows from operations - fixed capital investment + net borrowing
Common-size Income Statement Ratios
income statement account
= ————————————————-
sales
Common-size Balance Sheet Ratios
balance sheet account
= —————————————————
total assets
Common-size Cash Flow Ratios
cash flow statement account
= ——————————————————
revenues
Original DuPont Equation
ROE = (net profit margin) (asset turnover) (leverage ratio)
Extended DuPont Equation
ROE = (net income/EBT)x(EBT/EBIT)x(EBIT/revenue)(revenue/total assets)x(total assets/total equity)
Basic EPS
net income - preferred dividends
= —————————————————
weighted ave number of common shares outstanding
Diluted EPS
[(weighted average shares) + (shares from conversion of conv.pfd. shares) + (shares from conversion of cov. debt) + (shares issuable from stock options)]
Coefficients of Variation:
CV Sales
std of sales
= ——————————–
mean sales
Coefficients of Variation:
CV Operating Income
std of operating income
= ——————————————
mean operating income
Coefficients of Variation:
CV Net Income
std net income
= ———————————
mean net income
Ending Inventory
= beg inventory + purchases - COGS
Straight Line Depreciation
[(cost - salvage value)/useful life]
DDB Depreciation
(2/useful life) x (cost - accumulated depreciation)
Units of Production Depreciation
[(original cost - salvage value)/ life in output units] x output units in the period
Deferred Taxes
income tax expense =
(taxes payable) + changeDTL - changeDTA
Debt Liabilities
interest expense =
mrk rate at issue) x (balance sheet value of liability at the beg of period
Cash Flow-to-Revenue
CFO
= —————————–
net revenue
Cash Return-on-Assets
CFO
= —————————–
average total assets
Cash Return-on-Equity
CFO
= ——————————
average total equity
Cash-to-Income
CFO
= ————————–
operating income
Cash Flow per Share
CFO - preferred dividends
= ——————————————————
weighted avg number of common shares
Debt Coverage
CFO
= ———————
total debt
Interest Coverage
CFO + interest paid + taxes paid
= ————————————————————–
interest paid
Reinvestment
CFO
= —————————————-
cash paid for long term assets
Debt Payment
CFO
= ———————————————
cash long term debt repayment
Dividend Payment
CFO
= —————————
dividends paid
Coverage Ratios: Investing & Financing
CFO
= —————————————————————————
cash outflows from investing and financing activities
