M8 - Ratio & Variance Analysis Flashcards
Ratio & Variance Analysis
Gross (Profit) Margin Formula
(Sales (net) - COGS) / Sales (net)
Profit Margin Formula
Net income / sales (net)
Return on Sales Formula
Income before interest income, interest expense, and taxes / sales (net)
Return on Assets (ROA)
Net income / average total assets
DuPont Return on Assets
Profit margin x asset turnover
Return on Equity
Net income / average total equity
Operating Cash Flow Ratio
Cash flow from operations / current liabilities
Current ratio
current assets / current liabilities
Quick ratio
(cash and cash equivalents + short-term marketable securities + receivable (net)) / current liabilities
AR turnover
sales (net) / average accounts receivable (net)
Days Sales in AR
Ending AR (net) / ( sales (net) / 365 )
Inventory Turnover
COGS / Average inventory
Days in inventory
Ending inventory / ( COGS / 365 )
AP Turnover
COGS / Average accounts payable
Days payables OS
Ending AP / ( COGS / 365 )
Cash conversion cycle
Days sales in AR + Days in inventory - Days of payables OS
Debt-to-equity
Total liabilities / total equity
Total debt ratio
Total liabilities / total assets
Equity multiplier
Total assets / total equity
Times interest earned
Income before interest expense and taxes / interest expense
EPS
Income available to common shareholders / weighted average common shares OS
Price-to-earnings ratio
Price per share / basic EPS
Dividend payout
cash dividends / net income
Asset turnover
Sales (net) / average total assets
