Fundamental Analysis Flashcards
Chapter 16 – Fundamental Analysis
What is the Balance Sheet Formula?
Total Assets = Total liabilities + Shareholders’ Equity OR Shareholders’ Equity = Total Assets – Total Liabilities
Chapter 16 – Fundamental Analysis
How do you calculate Working Capital?
Working Capital = Current Assets – Current Liabilities
Chapter 16 – Fundamental Analysis
What is the formula for Current Ratio?
Current Ratio = Current Assets / Current Liabilities
Chapter 16 – Fundamental Analysis
How is the Quick Asset (Acid Test) Ratio calculated?
Quick Asset (Acid Test) Ratio = (Current Assets – Inventory) / Current Liabilities
Chapter 16 – Fundamental Analysis
What is the formula for Debt-to-Equity Ratio?
Debt-to-Equity Ratio = Debt / Total Shareholders’ Equity
Chapter 16 – Fundamental Analysis
How do you calculate basic Earnings Per Share (EPS)?
Basic EPS = (Net Income – Preferred Dividend) / Total Common Shares Outstanding
Chapter 16 – Fundamental Analysis
What is the formula for Current Yield (for stock)?
Current Yield = Annual Dividend / Current Market Price
Chapter 16 – Fundamental Analysis
How is Dividend Payout Ratio calculated?
Dividend Payout Ratio = Annual Common Stock Dividend / EPS
Chapter 16 – Fundamental Analysis
What is the formula for Price/Earnings (P/E) Ratio?
Price/Earnings Ratio = Current Market Price / EPS
