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Intro to Corporate Finance > Formulas > Flashcards

Formulas Flashcards

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1
Q

What is ROS?

A

Return on Sales = EBIT/Sales

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2
Q

What is AUR?

A

Asset utility ratio = Sales/Capital employed (shareholdersfunds+longtermdebt)

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3
Q

What is ROCE?

A

Return on Capital employed = EBIT/Capital Employed

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4
Q

What is the relationship between ROCE ROS and AUH?

A

ROCE = ROS x AUH

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5
Q

What is the current ratio?

A

Current Assets/Current Liabilities

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6
Q

What is the Quick Ratio

A

Current Assets - Inventory/Current Liabilities

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7
Q

What is the Acid Test?

A

Same as Quick Ratio

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8
Q

What is the liquidity ratio?

A

Same as the Quick Ratio

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9
Q

What is Working Capital?

A

Current Assets - Current Liabilities

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10
Q

What is Leverage?

A

Debt to Equity Ratio. Mainly in USA

Short term + Long term debt/Shareholders Equity

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11
Q

What is Gearing?

A

European Measure similar to Leverage

Short + Long Term Debt/Short + Long term debt + Shareholders Equity x100

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12
Q

What does Gearing Show?

A

It will show, through the calculation, the percentage of total funding is debt.

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13
Q

What is Creditor Days?

A

Trade payables (creditors)/COGS x 365

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14
Q

What is Stock Days?

A

Stock/COGS x 365

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15
Q

What is Debtor Days?

A

Debtors (receivables)/Sales

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16
Q

What is Debtor Turnover, Stock Turnover and Creditor Turnover?

A

Its the same as Debtor Days and so on… Different Terminology.

17
Q

What is ROE?

A

Return On Equity = Net Profit/Shareholders Funds x 100

18
Q

What is the Payout Ratio?

A

Dividend/Net Profit x 100

19
Q

What is Interest Cover Ratio?

A

EBIT/Interest Expense

20
Q

What is EPS?

A

Earnings per share = Net Profit/#shares in circulation

21
Q

What is PE Ratio

A

Price Earnings Ratio = Market price of share/EPS

Intro to Corporate Finance (5 decks)

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