Ratios Flashcards
Net working capital
Current Assets - Current Liabilities
Current Ratio
Current Assets/ Current Liabilities
Acid Test or Quick Ratio
(Cash + marketable securities + net receivables)/ Current Liabilities
Defensive Interval Ratio
(Cash + marketable securities + net receivables) / average daily cash expenditures
Debt to Equity
Total Liabilities/ Owners Equity
Times interest earned
(Income before taxes and interest charges)/ (interest charges)
Times preferred dividends earned
(Net income)/ (annual preferred dividend requirement)
Accounts Receivables Turnover
Net credit sales/ average net receivables
Number of days sales in average receivables
360/ receivables turnover
Inventory turnover
Cost of good sold/ average inventory
Return on total assets
(Net income + interest expense ~ net of tax)/ average total assets
Number of days supply in average inventory
360/ inventory turnover
Length of operating cycle
(Number of days sales in average receivables) + (number of days supply in average inventory)
Book value of common share
Common stockholders equity/ number of common shares outstanding
Book value of preferred stock
Preferred stockholders equity/ number of preferred stocks outstanding
Return on common stockholders equity
(Net income - preferred dividends) / average common stockholders equity
Return on stockholders equity
Net income / average stockholders equity
Earnings per share
(Net income- preferred dividends) / average number of common shares outstanding
Price Earnings Ratio
Market price per common share/ earnings per common shares
Dividend Payout Ratio
Cash dividends per common share/ earnings per common share
Yield on common stock
Dividends per common share/ market price per common share
Average annual accounting income
Annual net cash flows generated
Economic value added
Net operating profit after tax
Contribution margin
Selling price
