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40 Cards in this Set
- Front
- Back
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Current ratio
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= Current assets ÷ Current liabilities
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Quick ratio
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= (Cash + Short-term marketable investments + Receivables) ÷ Current liabilities
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Cash ratio
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= (Cash + Short-term marketable investments) ÷ Current liabilities
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Defensive interval ratio
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= (Cash + Short-term marketable investments + Receivables) ÷ Daily cash expenditures
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Receivables turnover ratio
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= Total revenue ÷ Average receivables
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Days of sales outstanding (DSO)
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= Number of days in period ÷ Receivables turnover ratio
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Inventory turnover ratio
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= Cost of goods sold ÷ Average inventory
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Days of inventory on hand (DOH)
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= Number of days in period ÷ Inventory turnover ratio
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Payables turnover ratio
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= Purchases ÷ Average trade payables
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Number of days of payables
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= Number of days in period ÷ Payables turnover ratio
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Cash conversion cycle (net operating cycle
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= DOH + DSO – Number of days of payables
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Working capital turnover ratio
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= Total revenue ÷ Average working capital Fixed asset
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turnover ratio
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= Total revenue ÷ Average net fixed assets
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Total asset turnover ratio
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= Total revenue ÷ Average total assets Gross profit margin = Gross profit ÷ Total revenue
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Operating profit margin
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= Operating profit ÷ Total revenue
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Pretax margin
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= Earnings before tax but after interest ÷ Total revenue
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Net profit margin
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= Net income ÷ Total revenue
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Operating return on assets
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= Operating income ÷ Average total assets
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Return on assets
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= Net income ÷ Average total assets
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Return on equity
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= Net income ÷ Average shareholders’ equity
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Return on total capital
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= Earnings before interest and taxes ÷ (Interest bearing debt + Shareholders’ equity)
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Return on common equity
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= (Net income – Preferred dividends) ÷ Average common shareholders’ equity
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Tax burden
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= Net income ÷ Earnings before taxes
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Interest burden
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= Earnings before taxes ÷ Earnings before interest and taxes
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EBIT margin
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= Earnings before interest and taxes ÷ Total revenue
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Financial leverage ratio (equity multiplier)
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= Average total assets ÷ Average shareholders’ equity
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Total debt
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= The total of interest-bearing short-term and long-term debt, excluding liabilities such as accrued expenses and accounts payable
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Debt-to-assets ratio
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= Total debt ÷ Total assets
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Debt-to-equity ratio
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= Total debt ÷ Total shareholders’ equity
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Debt-to-capital ratio
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= Total debt ÷ (Total debt + Total shareholders’ equity)
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Interest coverage ratio
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= Earnings before interest and taxes ÷ Interest payments
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Fixed charge coverage ratio
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= (Earnings before interest and taxes + Lease payments) ÷ (Interest payments + Lease payments)
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Dividend payout ratio
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= Common share dividends ÷ Net income attributable to common shares
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Retention rate
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= (Net income attributable to common shares – Common share dividends) ÷
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Net income attributable to common shares
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= 1 – Payout ratio
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Sustainable growth rate
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= Retention rate × Return on equity
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Earnings per share
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= (Net income – Preferred dividends) ÷ Weighted average number of ordinary shares outstanding
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Book value per share
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= Common stockholders’ equity ÷ Total number of common shares outstanding
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Free cash flow to equity (FCFE)
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= Cash flow from operating activities – Investment in fixed capital + Net borrowing
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Free cash flow to the firm (FCFF)
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= Cash flow from operating activities + Interest expense × (1 – Tax rate) – Investment in fixed capital (Interest expense should be added back only if it was subtracted in determining cash flow from operating activities. This may not be the case for companies electing an alternative treatment under IFRS.)
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