Liquity Current Ratio = Current assets/ Current liabilities •
A liquidity ratio that measures a company's ability to pay short-term obligations.
Quick Ratio = Current assets – Inventory / Current liabilities •
The quic ratio measures a company!s ability to meet its short-term obligations "ith its most liquid assets.
Average Collection Period = Acct #eceivable / Average Average sales per day$ %Average %Average sales per day = Annual &ales/()* •
The appro+imate amount o, time that it taes ,or a business to receive payments o"ed$ in terms o, receivables$ ,rom its customers and clients.
Inventory Tu Turnover rnover = Cost o, goods sold/Inventory
o, days = ()/Inventory turnover •
A ratio ratio sho"ing ho" many times a company's inventory is sold and replaced over a period. Profitability & Activity
Total Assets Turnover = &ales / Total Assets •
The amount o, sales or revenues generated per dollar o, assets. The Asset Turnover ratio is an indicator o, the e,,iciency "ith "hich a company is deploying its assets.
Fixed Assets Tu Turnover rnover = &ales / i+ed Assets !erating Return on Assets = perating pro,its / Total Assets •
perating return on assets indicates the company!s operating income generated per dollar invested in total assets.
!erating Profit "argin = perating pro,it / &ales •
perating margin is a measurement o, "hat proportion o, a c ompany's revenue is le,t over a,ter paying ,or variable costs o, production such as "ages$ ra" materials$ etc. A healthy operating margin is required ,or a company to be able to pay ,or its ,i+ed costs$ such as interest on debt.
#ross Profit "argin $ #ross Profit%ales •
A ,inancial metric used to assess a ,irm's ,inancial health by revealing the proportion o, money le,t over ,rom revenues a,ter accounting ,or the cost o, goods sold. 0ross pro,it margin serves as the source ,or paying additional e+penses and ,uture savings.
!erating Profit "argin = 12IT / &ales 'et Profit "argin = 1arnings Available to Common &tocholders/ &ales •
The percentage o, revenue remaining a,ter all operating e+penses$ interest$ ta+es and pre,erred stoc dividends %but not common stoc dividends* have been deducted ,rom a company's total revenue.
Return on (quity = 3et Income/ Common 1quity
Common 1quity includes both common stoc and retained earnings •
The amount o, net income returned as a percentage o, shareholders equity. #eturn on equity measures a corporation's pro,itability by revealing ho" much pro,it a company generates "ith the money shareholders have invested.
)ebt Ratio = Total debt/ Total Assets •
A ,inancial ratio that measures the e+tent o, a company!s or consumer!s leverage. The debt ratio is de,ined as the ratio o, total deb t to total assets$ e+pressed in percentage$ and can be interpreted as the proportion o, a company!s assets that are ,inanced by debt.
Ti*es Interest (arned = perating Income/Interest •
A metric used to measure a company's ability to meet its debt obligations. It is calculated by taing a company's earnings be,ore interest and ta+es %12IT* and dividing it by the total interest payable on bonds and other contractual debt. It is usually quoted as a ratio and indicates ho" many times a company can cover its interest charges on a preta+ basis. ailing to meet these obligations could ,orce a company into banruptcy. Perce!tion
Price (arning = 4rice per share/ 1arnings per share
3et Income – 5ividends on pre,erred &tocs / Average outstanding &hares
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A valuation ratio o, a company's current share price compared to its per-share earnings.
Price to +ook = 4rice per share / 1quity boo value per share •
A ratio used to compare a stoc's maret value to its boo value. It is calculated by dividing the current closing price o, the stoc by the latest quarter's boo value per share.
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FICIAL ,I'-(TP()IA. ratio used to compare a stoc's maret value to its boo value. It is calculated by dividing the current closing price o, the stoc by the latest quarter's boo value per share.
Also no"n as the 6price-equity ratio6. Calculated as7 •
(quity +ook value !er s/are = Common equity/ Common &toc utstanding
Common 1quity = Common &tocs 8 #etaining 1arnings •
A ,inancial measure that represents a per share assessment o, the minimum value o, a company's equity. 9ore speci,ically$ this value is determined by relating the original value o, a ,irm's common stoc ad:usted ,or any out,lo" %dividends and stoc buybacs* and in,lo" %retained earnings* modi,iers to the amount o, shares outstanding.
)ebt0to0Ca!ital Ratio =5ebt/&hareholder!s 1quity 8 5ebt •
A measurement o, a company's ,inancial leverage$ calculated as the company's debt divided by its total capital. 5ebt includes all short-term and long-term obligations. Total capital includes the company's debt and shareholders' equity$ "hich includes common stoc$ pre,erred stoc$ minority interest and net debt.
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