Accounts Final

Leverage Ratios: 1. Total debt ratio ratio =(Long =(Long term loan+CL)/T loan+CL)/Total otal Asset 2. Debt-e Debt-equi quity ty rati ratio o = Total Total debt/ debt/ Equi Equity ty 3. Financial Financial Leverag Leveragee = EBIT/EB EBIT/EBT T = EBIT(OP EBIT(OP)/(E )/(EBIT-I BIT-Intere nterest) st) 4. Intere Interest st covera coverage ge ratio ratio = EBIT/I EBIT/Inte nteres restt 5. Preference Preference Dividend Dividend coverage coverage ratio ratio = PAT/Prefer PAT/Preference ence dividend dividend 6. Proprietar Proprietary y ratio ratio = Share holder’s holder’s fund/T fund/Total otal Assets Assets Activity Ratios: 1. Debtor turnover turnover ratio(DT ratio(DTR) R) = Net credit credit sales/Avera sales/Average ge receivable receivabless 1a. Average collection period = 360/DTR or12/DTR  2. Creditor’ Creditor’ss turnover turnover ratio(CT ratio(CTR)= R)= Credit Credit purchase purchase /Averag /Averagee payables payables 2a . Average payments period = 360/CTR or 12/CTR  3. Inventory Inventory turnover turnover ratio(ITR ratio(ITR)) = COGS/Averag COGS/Averagee Inventory Inventory 3a. Inventory holding period = 360/ITR  4. Asset Asset turnov turnover er ratio ratio = sales sales/to /total tal Asset Assetss

Liquidity Analysis Ratios Current Ratio Current Assets -----------------------Current Liabilities

Current Ra Ratio =

Quick Ratio

Quick Ra Ratio =

Quick Assets ---------------------Current Liabilities

Quick Assets = Current Assets - Inventories

Net Working Capital Ratio

Net Wo Working Ca Capital Ra Ratio =

Net Working Capital -------------------------Total Assets

Net Working Capital = Current Assets - Current Liabilities

Profitability Analysis Ratios

Return on Assets (ROA) Net Income ---------------------------------Average Total Assets

Return on Assets (ROA) =

Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2

Return on Equity (ROE) Net Income -------------------------------------------Average Stockholders' Equity

Return on Equity (ROE) =

Average Stockholders' Equity = (Beginning Stockholders' Equity + Ending Stockholders' Equity) / 2

Return on Common Equity (ROCE)

Return on Common Equity =

Net Income -------------------------------------------Average Common Stockholders' Equity

Average Common Stockholders' Equity = (Beginning Common Stockholders' Equity + Ending Common Stockholders' Equity) / 2

Profit Margin

Profit Margin =

Net Income ----------------Sales

Earnings Per Share (EPS)

Earnings Per Share =

Net Income --------------------------------------------Number of Common Shares Outstanding

Activity Analysis Ratios Assets Turnover Ratio

Assets Turnover Ratio =

Sales ---------------------------Average Total Assets

Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2

Accounts Receivable Turnover Ratio

Accounts Receivable Turnover Ratio =

Sales ----------------------------------Average Accounts Receivable

Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2

Inventory Turnover Ratio

Inventory Turnover Ratio =

Cost of Goods Sold --------------------------Average Inventories

Average Inventories = (Beginning Inventories + Ending Inventories) / 2

Capital Structure Analysis Ratios Debt to Equity Ratio

Debt to Equity Ratio =

Total Liabilities ---------------------------------Total Stockholders' Equity

Interest Coverage Ratio

Interest Coverage Ratio =

Income Before Interest and Income Tax Expenses ------------------------------------------------------Interest Expense

Income Before Interest and Income Tax Expenses = Income Before Income Taxes + Interest Expense

Capital Market Analysis Ratios Price Earnings (PE) Ratio

Price Earnings Ratio =

Market Price of Common Stock Per Share -----------------------------------------------------Earnings Per Share

Market to Book Ratio

Market to Book Ratio =

Market Price of Common Stock Per Share ------------------------------------------------------Book Value of Equity Per Common Share

Book Value of Equity Per Common Share = Book Value of Equity for Common Stock / Number of Common Shares

Dividend Yield

Dividend Yield =

Annual Dividends Per Common Share -----------------------------------------------Market Price of Common Stock Per Share

Book Value of Equity Per Common Share = Book Value of Equity for Common Stock / Number of Common Shares

Dividend Payout Ratio

Dividend Payout Ratio =

Cash Dividends -------------------Net Income

ROA = Profit Margin X Assets Turnover Ratio ROA = Profit Margin X Assets Turnover Ratio

ROA =

Net Income ------------------------ = Average Total Assets

Profit Margin = Net Income / Sales Assets Turnover Ratio = Sales / Averages Total Assets

Net Income -------------- X Sales

Sales --------------Average Total