ratios Flashcards
Working Capital
current assets-current liabilities
Liquidity
Current ratio (working capital ratio)
Current assets/ current liabilities
Liquidity
Acid-test ratio
cash equivalents+ marketable securities+ accounts receivable / Current liabilities
Liquidity
Cash ratio
Cash equivalents+ marketable securities / Current liabilities
Liquidity
Accounts receivable turnover
Net credit sales / average net receivables
Activity
Accounts Receivable turnover in days
Average net receivables/
Net credit sales/365
Activity
Inventory turnover
Cost of goods sold/ Average inventory
Activity
Inventory turnover in days
Average inventory/
Cost of goods sold/365
Activity
Operating Cycle
Accounts receivable turnover in days+ inventory turnover in days
Activity
Working capital turnover
Sales/ average working capital
Activity
Total asset turnover
Net sales/ average total assets
Activity
Accounts payable turnover
Purchases/ average accounts payable
Activity
Days in accounts payable
Average accounts payable/
purchases /365
Activity
Net profit margin
Net income/ Net sales
Profitability
Return on total assets
Net income/average total assets
Profitability
Return on assets
Net profit margin x Total asset turnover
Profitability
Return on investment
Net income + Interest expense (1-tax rate) \
Average (long term liabilities + Equity)
Profitability
Return on common equity
Net income - preferred dividends /
Average common equity
Profitability
Net operating margin percentage
Net operating income /
Net sales
Profitability
Gross (profit) Margin Percentage
Gross (profit) margin /
Net sales
Profitability
Operating cash flow per share
Operating cash flow /
Common shares outstanding
Profitability
Degree of Financial Leverage
Earnings before interest and taxes /
Earnings before taxes
Investor
Earnings per share
Net income - Preferred dividends /
Weighted average number of common shares outstanding
Investor
Price/ earnings ratio
Market price per share /
Diluted earnings per share
Investor
Dividend payout ratio
Dividend per common share/
Diluted earnings per share
Investor
Dividend yield
Dividends per common share /
Market price per share
Investor
Book value per share
Total stockholders’ equity - preferred stock /
Number of common shares outstanding
Investor
Debt/Equity
total Liabilities /
Common stockholders’ equity
Long- term debt
Debt ratio
total liabilities /
Total assets
Long-term debt
Times interest earned
Earnings before taxes and interest /
Interest
Long-term debt
Operating cash flow/total debt
Operating cash flow /
Total debt
Long -term debt
