Formulas Flashcards
Times Interest Earned
Net Income before interest and taxes / Interest Expense
Net Working Capital
Current Assets - Current Liabilities
Current Ratio
Current Assets / Current Liabilities
Quick Ratio (Acid-Test Ratio)
(Cash + Marketable Securities + AR) / Current Liabilities
Cash Ratio
(Cash + Marketable Securities) / Current Liabilities
Current Cash Debt Coverage Ratio
Cash Provided from Operations / Avg Current Liabilities
Debt to Equity
Total Liabilities / Total Stockholders’ Equity
Long-term Debt to Equity
Long-term Liabilities / Stockholders’ Equity
Debt to Total Assets
Total Liabilities / Total Assets
Fixed Charge Coverage (Earnings to Fixed Charges Ratio)
(EBIT + Fixed Charges) / (Fixed Charges + Interest Expense)
Interest Coverage (Times Interest Earned Ratio)
EBIT / Interest Expense
Free Cash Flow
Cash Provided by Operations
- Capital Expenditures
- Cash Dividends
Degree of Operating Leverage (DOL)
% Change in EBIT / % in Sales
or
Contribution Margin / EBIT
Degree of Financial Leverage (DFL)
% Change in Net Income / % Change in EBIT
or
EBIT / EBT
Degree of Total Leverage
DOL x DFL
Inventory Turnover Ratio
COGS / Avg Inventory
Days Sales in Inventory
365 Days / Inventory Turnover
or
Avg Inv / (COGS / 365)
AR Turnover Ratio
Credit Sales / Avg Gross AR
Days Sales in Receivables
365 Days / AR Turnover
or
Avg Gross AR / (Credit Sales / 365)
AP Turnover Ratio
Credit Purchases / Avg AP
Days Purchases in AP
365 days / AP Turnover
or
Avg AP / (Credit Purchases / 365)
Operating Cycle
Days Sales in AR + Days Sales in Inventory
Cash Cycle
Days Sales in AR + Days Sales in Inventory - Days Purchases in AP
or
Operating Cycle - Days Purchases in AP
Asset Turnover
Net Sales / Avg Total Assets
Fixed Asset Turnover
Net Sales / Avg Net PPE
Gross Margin
Gross Profit / Net Sales
Operating Profit Margin
Operating Income / Net Sales
Profit Margin
Net Income / Net Sales
Earnings before Interest, Taxes, Depr, & Amort Margin
EBITDA
EBITDA / Net Sales
Return on Assets
Net Income / Avg Total Assets
Return on Equity
(Net Income - Preferred Dividends) / Avg Common Stockholders’ Equity
Market/Book Ratio
Stock Price / Book Value per Share
Price/Earnings Ratio (P/E)
Stock Price / Earnings per Share
Earnings Per Share (EPS)
(Net Income - Preferred Dividends) / Weighted Avg Common Shares Outstanding
Diluted EPS
(Net Income - Preferred Dividends) / Diluted Weighted Avg Common Shares Outstanding
Earnings Yield
EPS / Market Price per Share
Dividend Yield
Dividend per share / Market Price per Share
Dividend Payout Ratio
Dividends / Earnings
DuPont Model of ROA
(Net Income / Sales) x (Sales / Avg Total Assets)
or
Net Profit Margin x Total Asset Turnover
DuPont Model on ROE
(Net Income / Avg Total Assets) x (Avg Total Assets / Avg Common Shareholders’ Equity)
or
ROA x Financial Leverage
*Financial Leverage = Assets / Equity
Sustainable Growth Rate (SGR)
ROE x (1 - Dividend Payout Ratio)
Accounting Profit
Accounting Revenues - Accounting Expenses
Rate of Return
(Capital Appreciation + Income) / Investment
or
[(Investmentt+1−Investmentt)+Income]÷Investmentt
Average Collection Period
Weighted Avg of times people pay
Average Balance in Receivables
Avg Daily Sales x Avg Collection Period
Formula to calculate not taking a discount
[(Discount %) / (100% - Discount %) x (Days in Year)] / (Total Payment Period - Discount Period)
Margin of Safety
Current Sales - Breakeven Sales
or
Margin of Safety / Current Sales = Margin of Safety %
Contribution Margin
Total Sales - Variable Costs
Standard Deviation:Expected Return Ratio
(Standard Deviation/Expected Return):(Expected Return/Expected Return)
Coefficient of Variation
Standard Deviation / Expected Return
