Liquidity Ratios Liquidity Ratios Liquidity Ratios

1. Current Ratio = Current Assets / Current Liabilities 1. Current Ratio = Current Assets / Current Liabilities 1. Current Ratio = Current Assets / Current Liabilities
2. Acid Test Ratio = Current Assets-Inventory-Prepaid Expenses / Current Liabilities 2. Acid Test Ratio = Current Assets-Inventory-Prepaid Expenses / Current Liabilities 2. Acid Test Ratio = Current Assets-Inventory-Prepaid Expenses / Current Liabilities
3. Cash Ratio = ( Cash + Marketable Securities ) / Current Liabilities 3. Cash Ratio = ( Cash + Marketable Securities ) / Current Liabilities 3. Cash Ratio = ( Cash + Marketable Securities ) / Current Liabilities
4. Net Working Capital = Current Assets - Current Liabilities 4. Net Working Capital = Current Assets - Current Liabilities 4. Net Working Capital = Current Assets - Current Liabilities

Management Efficiency Ratios Management Efficiency Ratios Management Efficiency Ratios

1. Receivable Turnover = Net Credit Sales / Average Accounts Receivable 1. Receivable Turnover = Net Credit Sales / Average Accounts Receivable 1. Receivable Turnover = Net Credit Sales / Average Accounts Receivable
2. Days Sales Outstanding = 360 Days / Receivable Turnover 2. Days Sales Outstanding = 360 Days / Receivable Turnover 2. Days Sales Outstanding = 360 Days / Receivable Turnover
3. Average Collection Period = Average AR/ Average Daily Sales 3. Average Collection Period = Average AR/ Average Daily Sales 3. Average Collection Period = Average AR/ Average Daily Sales
4. Inventory Turnover = Cost of Sales / Average Inventory 4. Inventory Turnover = Cost of Sales / Average Inventory 4. Inventory Turnover = Cost of Sales / Average Inventory
5. Days Inventory Outstanding = 360 Days / Inventory Turnover 5. Days Inventory Outstanding = 360 Days / Inventory Turnover 5. Days Inventory Outstanding = 360 Days / Inventory Turnover
6. Accounts Payable Turnover = Net Credit Purchases / Ave. Accounts Payable 6. Accounts Payable Turnover = Net Credit Purchases / Ave. Accounts Payable 6. Accounts Payable Turnover = Net Credit Purchases / Ave. Accounts Payable
7. Days Payable Outstanding = 360 Days / Accounts Payable Turnover 7. Days Payable Outstanding = 360 Days / Accounts Payable Turnover 7. Days Payable Outstanding = 360 Days / Accounts Payable Turnover
8. Operating Cycle = Days Inventory Outstanding + Days Sales Outstanding 8. Operating Cycle = Days Inventory Outstanding + Days Sales Outstanding 8. Operating Cycle = Days Inventory Outstanding + Days Sales Outstanding
9. Cash Conversion Cycle = Operating Cycle - Days Payable Outstanding 9. Cash Conversion Cycle = Operating Cycle - Days Payable Outstanding 9. Cash Conversion Cycle = Operating Cycle - Days Payable Outstanding
10. Total Asset Turnover = Net Sales / Average Total Assets 10. Total Asset Turnover = Net Sales / Average Total Assets 10. Total Asset Turnover = Net Sales / Average Total Assets

Leverage Ratios Leverage Ratios Leverage Ratios

1. Debt Ratio = Total Liabilities / Total Assets 1. Debt Ratio = Total Liabilities / Total Assets 9. Debt Ratio = Total Liabilities / Total Assets
2. Equity Ratio = Total Equity / Total Assets 2. Equity Ratio = Total Equity / Total Assets 1. Equity Ratio = Total Equity / Total Assets
3. Debt-Equity Ratio = Total Liabilities / Total Equity 3. Debt-Equity Ratio = Total Liabilities / Total Equity 2. Debt-Equity Ratio = Total Liabilities / Total Equity
4. Times Interest Earned = EBIT / Interest Expense 4. Times Interest Earned = EBIT / Interest Expense 3. Times Interest Earned = EBIT / Interest Expense
5. Fixed Charged Coverage = (EBIT + Fixed Charges)/ (Interest Charges + Fixed Charges) 5. Fixed Charged Coverage = (EBIT + Fixed Charges)/ (Interest Charges + Fixed Charges) 4. Fixed Charged Coverage = (EBIT + Fixed Charges)/ (Interest Charges + Fixed Charges)
6. Cash Flow Coverage Ratio = (EBIT + Fixed Charges + Depreciation)/ [Interest Charges + Fixed 6. Cash Flow Coverage Ratio = (EBIT + Fixed Charges + Depreciation)/ [Interest Charges + Fixed 5. Cash Flow Coverage Ratio = (EBIT + Fixed Charges + Depreciation)/ [Interest Charges + Fixed
Charges + (Preferred Stock Dividend/1- Tax Rate) + (Debt Repayment/1-Tax Rate)] Charges + (Preferred Stock Dividend/1- Tax Rate) + (Debt Repayment/1-Tax Rate)] Charges + (Preferred Stock Dividend/1- Tax Rate) + (Debt Repayment/1-Tax Rate)]
7. Book Value of Securities (Bonds/ Preferred Stock/ Common Stocks) = Value of each security/ 7. Book Value of Securities (Bonds/ Preferred Stock/ Common Stocks) = Value of each security/ 6. Book Value of Securities (Bonds/ Preferred Stock/ Common Stocks) = Value of each security/
each number of shares outstanding each number of shares outstanding each number of shares outstanding
8. Capitalization Ratios = the proportion of the face value of a particular type of security to the 8. Capitalization Ratios = the proportion of the face value of a particular type of security to the 7. Capitalization Ratios = the proportion of the face value of a particular type of security to the
companys total equity companys total equity companys total equity

Profitability Ratios Profitability Ratios Profitability Ratios

1. Profit Margin on Sales = Net Income Available To Common Stock/ Sales 1. Profit Margin on Sales = Net Income Available To Common Stock/ Sales 1. Profit Margin on Sales = Net Income Available To Common Stock/ Sales
2. Gross Profit Rate = Gross Profit / Net Sales 2. Gross Profit Rate = Gross Profit / Net Sales 2. Gross Profit Rate = Gross Profit / Net Sales
3. Return on Sales = Net Income / Net Sales 3. Return on Sales = Net Income / Net Sales 3. Return on Sales = Net Income / Net Sales
4. Return on Assets = Net Income / Average Total Assets 4. Return on Assets = Net Income / Average Total Assets 4. Return on Assets = Net Income / Average Total Assets
5. Return on Stockholders' Equity = Net Income / Average Stockholders' Equity 5. Return on Stockholders' Equity = Net Income / Average Stockholders' Equity 5. Return on Stockholders' Equity = Net Income / Average Stockholders' Equity
6. Basic Earning Power = EBIT/ Average Total Assets 6. Basic Earning Power = EBIT/ Average Total Assets 6. Basic Earning Power = EBIT/ Average Total Assets
7. Earnings per Share = ( Net Income - Preferred Dividends ) / Average Common Shares 7. Earnings per Share = ( Net Income - Preferred Dividends ) / Average Common Shares 7. Earnings per Share = ( Net Income - Preferred Dividends ) / Average Common Shares
Outstanding Outstanding Outstanding
8. Book Value per Share = Common SHE / Average Common Shares 8. Book Value per Share = Common SHE / Average Common Shares 8. Book Value per Share = Common SHE / Average Common Shares
9. Dividend Pay-out Ratio = Dividend per Share / Earnings per Share 9. Dividend Pay-out Ratio = Dividend per Share / Earnings per Share 9. Dividend Pay-out Ratio = Dividend per Share / Earnings per Share
10. Dividend Per Share = Dividends Paid to Common Stock/ Common Shares Outstanding 10. Dividend Per Share = Dividends Paid to Common Stock/ Common Shares Outstanding 10. Dividend Per Share = Dividends Paid to Common Stock/ Common Shares Outstanding

Analyzing the Retained Earnings Analyzing the Retained Earnings Analyzing the Retained Earnings
1. Price-Earnings Ratio = Market Price per Share / Earnings per Share 1. Price-Earnings Ratio = Market Price per Share / Earnings per Share 1. Price-Earnings Ratio = Market Price per Share / Earnings per Share
2. Market Book Ratio = Market Price Per Share/ Book Value Per Share 2. Market Book Ratio = Market Price Per Share/ Book Value Per Share 2. Market Book Ratio = Market Price Per Share/ Book Value Per Share
3. Dividend Yield Ratio = Dividend per Share / Market Price per Share 3. Dividend Yield Ratio = Dividend per Share / Market Price per Share 3. Dividend Yield Ratio = Dividend per Share / Market Price per Share