Ratios Flashcards
Asset turnover (AT)
sales / average total assets
Accounts receivable turnover
sales / average accounts receivable
Inventory turnover
COGS / average inventory
Property, plant, and equipment turnover
sales / average PP&E
Current ratio
current assets / current liabilities
Quick ratio
cash + short-term securities + accounts receivable / current liabilities
Operating cash flow to current liabilities
operating cash flow / average current liabilities
Times interest earned
earnings before interest expense and taxes / interest expense
Debt-to-equity
total liabilities / total stockholders’ equity
Return on equity
net income / average stockholders’ equity
Earnings without interest expense
net income + [interest expense * (1 - tax rate)]
Return on assets
earnings without interest expense / average total assets
Return on financial leverage
ROE - ROA
Profit margin
earnings without interest expense / sales revenue
Gross profit margin
sales revenue - cogs / sales revenue
Expense-to-sales
individual expense items / sales
Operating cash flow to current liabilities
operating cash flow / average current liabilities
Operating cash flow to capital expenditures
operating cash flow / annual capital expenditures
Free cash flow
operating cash flow - net capital expenditures
Net operating profit after taxes (NOPAT)
Net income - [(Nonoperating revenues - Nonoperating expense) x (1 - Statutory tax rate)]
Return on net operating assets (RNOA)
NOPAT / Average net operating assets
Accounts receivable turnover
Sales revenue / Average accounts receivable
Net operating profit margin (NOPM)
Net operating profit and taxes (NOPAT) / Sales revenue
Average collection period (ACP)
Average accounts receivable / Average daily sales = 365 / ART
Return on capital employed
Income from operations before taxes / Average net operating assets
Du Pont Theorem
PM x AT x Leverage
NI/Sales x Sales/Avg Assets x Avg Assets/Avg Equity
