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35 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Current Ratio |
Current Assets / Current Liabilities |
measures a company's ability to pay short-term and long-term obligations
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Quick Ratio (aka Acid Test) |
Current Assets - Inventory / Current Liabilities |
measures a company’s ability to meet its short-term obligations with its most liquid assets
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Inventory Turnover Ratio |
COGS / Inventory |
how efficient management is at managing company inventory and generating sales from it.
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Assets Turnover Ratio |
Revenues / Total Assets |
used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.
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Debt to Asset Ratio |
Total Debt / Total Assets |
Total debt to total assets is a leverage ratio that defines the total amount of debt relative to assets.
The higher the ratio, the higher the degree of leverage, and consequently, financial risk |
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Times Interest Earned |
EBIT / Interest Expense |
How well interest can be paid back. This number should be high preferably |
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Return on Assets (ROA) |
Net Income / Total Assets |
an indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings
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Return on Equity (ROE) |
Net Income / Total Equity
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Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested
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Dupont Analysis |
ROE = Net Profit Margin * Asset Turnover * Leverage Ratio |
Assets are measured at their gross book value rather than at net book value to produce a higher return on equity (ROE)
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Gross Profit Margin |
Gross Profit / Revenue |
Used to assess a company's financial health and business model by revealing the proportion of money left over from revenues after accounting for the cost of goods sold (COGS).
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Net Income Margin |
Net Income / Revenue |
Shows how much of each dollar collected by a company as revenue translates into profit
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Leverage Ratio (LEV) |
Total Assets / Total Equity |
looks at how much capital comes in the form of debt (loans), or assesses the ability of a company to meet financial obligations.
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Book Value Per Share (BVPS) |
Total Equity / No of Shares |
The book value of equity per share is one factor that investors can use to determine whether a stock price is undervalued. If a business can increase its BVPS, investors may view the stock as more valuable, and the stock price increases
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Economic value added (EVA) |
Net Operating Profit After Tax - (Capital Invested x WACC) |
A measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit, adjusted for taxes on a cash basis.
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Price-Earnings Ratio (P/E) |
Price Per Share / Earnings per Share |
measures its current share price relative to its per-share earnings.
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Price-to-Book (P/B) |
Price Per Share / (Total Assets - Intangible Assets and Liabilities) |
AKA Price-Equity Ratio used to compare a stock's market value to its book value. |
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Days Sales Outstanding |
Accounts Receivable / (Total Credit Sales / # of days) |
a measure of the average number of days that a company takes to collect revenue after a sale has been made
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Earning Power |
EBIT / Total Assets |
a business' ability to generate profit from conducting its operations.
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Sustainable Growth Formula |
Growth = (ROE) * (Retention Rate)
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a business' ability to generate profit from conducting its operations.
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Cash Ratio |
Cash / Current Liabilities
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a business' ability to generate profit from conducting its operations.
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Net Profit Margin |
Net Income / Revenue |
net profit margins show how much of each dollar collected by a company as revenue translates into profit.
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Return on Sales |
EBIT / Revenue |
used to evaluate a company's operational efficiency
provides insight into how much profit is being produced per dollar of sales |
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Receivable Turnover Ratio |
Net Credit Sales / Avg Accounts Receivable |
used to quantify a firm's effectiveness in extending credit and in collecting debts on that credit. measures how efficiently a firm uses its assets |
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Debt Ratios |
Debt Ratio Leverage Ratio Times Interest Earned Ratio |
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Liquidity Ratios |
Current Ratio Quick Ratio (Acid Test) |
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Profitability Ratios |
Net Profit Margin Return on Assets (ROA) Return on Equity (ROE) Net Profit Margin Earning Power |
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Efficiency Ratios |
Inventory Turnover Days Sales Outstanding Assets Turnover |
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Revenue |
Sales |
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Sales |
Revenue |
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EBIT |
Earnings before Interest and Taxes |
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EBT |
Earnings before Taxes |
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COGS |
Cost Of Goods Sold |
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OIROI |
EBIT / Total Assets |
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Operating Income (OI) |
same as EBIT |
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NOPAT |
Net Operating Profit After Taxes |
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