Section 3: Ratio Flashcards
Gross Margin
Gross Profit / Net Sales
Operating Profit Margin
Operating Profit / Net Sales
Free Cash Flow
NOPAT + Depreciation + Amortization - Capital Expenditures - Net Increases in Working Capital
Residual Income
Operating Profit - Interest on Investment
Interest on Investment = Invested Capital * Req. Rate of Return
Economic Value Added (EVA)
NOPAT - Cost of Financing
Cost of Financing = (Total Assets - Current Liabilities) * WACC
Economic Rate of Return on Common Stock
(Dividends + Change in Price) / Beginning Price
Return on Investment (based on assets)
Net Income / Total Assets (Or Avg. Invested Capital)
DuPont ROI
Return on Sales * Asset Turnover
Return on Sales
Net Income / Sales
Asset Turnover
Sales / Total Assets
Return on Assets
Net Income / Avg Total Assets
Return on Equity
Net Income / Avg. Common Stockholder’s Equity
Common Stockholder’s Equity = Stockholder’s Equity - Preferred Stock Liquidation Value
Receivable Turnover
Net Credit Sales / Avg A/R
Receivables Collection Period
Avg. A/R / Avg. Credit Sales per day
Inventory Turnover
COGS / Avg. Inventory
Inventory Conversion Period
Avg. Inventory / Avg. COGS per day
Total Asset Turnover
Sales / Avg. Total Assets
Fixed Asset Turnover
Sales / Avg. Net Fixed Assets
Debt to Total Assets
Total Liabilities / Total Assets
Debt to Equity Ratio
Total Debt / Total Equity
Times Interest Earned Ratio
EBIT / Interest Expense
Current Ratio
Current Assets / Current Liabilities
Quick (Acid Test) Ratio
Quick Asset / Current Liabilities
Quick Assets = Cash +Marketable Securities +A/R
Market Capitalization
Common Stock price per share * Common Stock shares outstanding
