Ratios Flashcards
Return on Equity(ROE)
Net profit after taxes/Shareholders equity ; higher
Return on Investment(ROI)
Net profit after taxes/Total Assets ;higher
Net Profit Margin
Net profit after taxes/sales; higher
Total Asset Turnover
sales/total assets ; higher
Inventory Turnover
Cost of good sold/Inventory ; higher
Interest Coverage
EBIT/ Interest Expense ; higher
Debt to Total Assets
total debt/total assets ; lower -
Acid Test
Current assets less inventories/ current liabilities ; higher ; greater than or equal to 1
Current
Current assets/current liabilities ; higher ; greater than or equal 2, ok if greater or equal than 1.5
debt to equity
Total debt/total equuity ; lower
debt to total assets- aka
debt ratio
Interest Coverage aka
Times interest earned
net profit margin aka
return on sales
total asset turnover aka
capital turnover
return on investment aka
return on assets
gross profit mgn
sales - cogs/sales ; higher
operating margin
ebit/sales ; higher
