Ratio Anaylsis Flashcards
Working Capital
Current assets- Current liabilities
Current Ratio
Current Assets
/
Current liabilities
Quick (acid test) ratio
Cash + Marketable securities + AR
/
Current liabilities
OR
(Current assets- Inventory- prepayments)
/
Current liabilities
Receivable Turnover
Net credit sales
/
Avg. Accounts Receivable
Receivable collection period
365
/
Accounts receivable turnover ratio
or
365 * Ending A/R
/
Credit sales
Inventory Turnover
Cost of good sold
/
Avg. inventory
Inventory conversion period
365
/
Inventory Turnover Ratio
Payables Turnover
Credit Purchases
/
Avg. Accounts Payable
Payable deferral period
365
/
Accounts payable turnover ratio
or
365 * Ending Accounts payable
/
credit purchases
Operating cycle
Inventory conversion period + Receivable collection period
Cash Cycle
Inventory conversion period + Receivable collection period - payable deferral period
Operating Cycle- Payable Deferral period
Fixed Asset turnover
Net sales
/
Avg. net fixed assets
Gross margin
Gross profit
/
sales
Operating profit margin
Operating profit
/
sales
Net profit margin
Net profit
/
sales
Return on Investment
Net income
/
Avg. Net assets
Average net assets= (Total assets- current liability) or ( non-current liability +equity)
Return on Assets
Net income
/
Avg. total assets
Return on equity
Net income
/
Avg. common stockholders equity
debt to total assets
Total liabilities
/
total assets
Debt to equity ratio
Total liabilities
/
Total Stockholders equity
Time interest earned ratio (interest coverage ratio)
Earnings before interest & taxes (EBIT)
/
Interest expense
Equity multiplier
Assets
/
equity
Price/ earnings (PE) ratio
Common stock price per share
/
Earnings per share
Book Value per share
Common stock equity
/
Common stock shared outstanding
