Ratios Flashcards
Current Ratio
Current Assets/Current Liabilities
Acid Test Ratio
Cash+Short Term Investments+Net Accounts Receivable / Current Liabilities
(Measure of a companys short term liquidity)
Accounts Receivable Turnover
Net credit sales / Average net account receivable
Inventory Turnover
COGS / Average Inventory
Measures the number of times, on average, the inventory is sold during the period
Profit Margin
Net Income / Net sales
Percentage of each euro of sales, that results in net income
Asset turnover
Net Sales / average total assets
Measures how efficient a company uses its assets to generate sales
Return on assets
Net Income / AVG total assets
Measures overall profitability
Return on Ordinary Shareholders Equity
Net Income - Preference dividends / AVG ordinary shareholders Equity
(Measures profitability from the ordinary shareholders viewpoint)
Earnings per share
Net Income-Preference Dividends / Weighted AVG Ordinary shares outstanding
(Measure of net income earned on each ordinary share)
Price-Earnings-Ratio
Market price per share / Earnings per share
Payout ratio
Cash Dividends declared on ordinary shares / net income
Debt to assets ratio
Total Liabilities / Total Assets
Measures the percentage of the total assets that creditors provide
Times Interest Earned
Net Income + Interest Expense + Income tax expense / Interest Expense
(Company‘s ability to meet interest payments as they come due)
