FSA Ratios Flashcards
Cash debt coverage (liquidity)
Cash from operations/ avg current liabilities
Short term debt paying ability
Receivables turnover ratio (liquidity)
Net credit receivables/ avg net receivables
Want high
Inventory turnover ratio (liquidity)
Cost of goods sold/ avg inventory
Want high
Days in inventory (liquidity)
365 days/ inventory turnover ratio
Want higher
Debt to total assets (solvency)
Total liabilities/ total assets
%total assets provided by creditors, want low
Times interest earned ratio (solvency)
Net income+interest expense+tax expense/ interest expense
Meet interest payments
Cash debt coverage (solvency)
Cash provided by operations/ avg total liabilities
Repay liabilities with cash, want high
Free cash flow (solvency)
Cash from operations- capital expenditures- cash dividends
Pay dividends or expand operations
Return on stockholders equity (profitability)
(Net incom-preferred stock dividends)/ avg common stockholders equity
How much net income per dollar invested
Return on assets ( profitability)
Net income/avg total assets
Profitability in terms of company investment in assets
Gross profit rate (profitability)
Gross profit/ net sales
Maintain selling price above cost of goods sold
Earnings per share (profitability)
(Net income-preferred stock dividends)/ avg common shares outstanding
PE (profitability)
Stock price/ EPS
Asset turnover
Net sales/ avg total assets
Profit margin
Net income/net sales
