FRA Ratios & Metrics Flashcards
What is the Quick Ratio?
Cash + Marketable Securities + Receivables / Current Liabilities
What is the Cash Ratio?
Cash + Marketable Securities / Current Liabilities
What is the Defensive Interval?
Cash + Marketable Securities + Receivables / Daily Cash Expenditures
What is Receivables Turnover?
Annual Sales / Average Receivables
What is Inventory Turnover ?
Cost of Goods Sold / Average Inventory
What is Payables Turnover Ratio?
Purchases / Avg. Trade Payables
Days of Sales Outstanding (DSO)
365 / Receivables Turnover
Days of Inventory On Hand
365 / Inventory Turnover
Number of Days of Payables
365 / Payables Turnover Ratio
Cash Conversion Cycle
(Days of Inventory on Hand) + (Days of Sales Outstanding) - (Number of days of payables)
Total Asset Turnover
Revenue / Avg. Total Assets
Fixed Asset Turnover
Revenue / Average Fixed Assets
Working Capital Turnover
Revenue / Average Working Capital
Gross Profit Margin
Gross Profit / Revenue
Operating Profit Margin
Operating Profit / Revenue = EBIT /Sales
Net Profit Margin
Net Income / Revenue
Return on Assets (Total Capital)
EBIT / Avg. Total Capital
Debt to Equity Ratio
Total Debt / Total Equity
Total Debt Ratio
Total Debt / Total Assets
Interest Coverage
EBIT / Interest
Fixed-Charge Coverage
EBIT + Lease Payments / Interest + Lease Payments
Growth Rate (g)
g = RR x ROE
Current Ratio?
Current Assets/Current Liabilities
Return on Equity (1)
ROE=(Net Income/EBT)x(EBT/EBIT)x(EBIT/Revenue)x(Revenue/avg. total assets)x(avg. total assets/avg. total equity)
Return On Equity (2)
ROE=Tax Burden x Int. Burden x EBIT Margin x Asset Turnover x Leverage
LIFO Results in:
Higher COGS, Lower gross profit, lower inventory balances
FIFO results in…
Lower COGS, Higher gross profit, higher inventory balances
Basic EPS
NI - Pref. Div./Wghtd. Avg. # of common shares outstanding
Diluted EPS
Adj. Income avail for common shares/wtd. Avg. common shares + potential common shr outstanding
Straight-Line Depreciation
Cost - Residual Value / Useful Life
Double-Declining Balance Depreciation
(2 / Useful Life) x (cost - accumulated depreciation)
Units of Production Depreciation
Cost - Salvage Val. / Useful Life in units x output units
Cash Flows from Operations (CFO):
Direct Method
Cash collections, cash inputs, cash opex, cash int. exp., cash taxes
Free Cash Flow (FCF)
Measures cash available for discretionary purposes. It is equal to operating cash flow less net capital expenditures.
Common Size Balance Sheet
Expresses all balance sheet accounts as a percentage of total assets.
Common Size Income Statement
Expresses all income statement items as a percentage of sales.
Common Size Cash Flow Statement
Expresses each line item as a percentage of total cash inflows (outflows), or as a percentage of net revenue.
Horizontal Common Size Financial Statement Analysis
Expresses each line item relative to its value in a common base period.
