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Fin Formulas

Fin Formulas

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Published by Naziba Naushin

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Published by: Naziba Naushin on Nov 21, 2012
Copyright:Attribution Non-commercial

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12/04/2012

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Financial ratio formulas
Prepared by Pamela Peterson Drake
1.
 
Operating cycle
InventoryInventoryNumber of days of inventory Average day's cost of goods soldCost of goods sold / 365
= =
 
 Accounts receivableAccounts receivableNumber of days of receivables Average day's sales on creditSales on credit / 365
= =
 
 Accounts payableAccounts payableNumber of days of payables Average day's purchasesPurchases / 365
= =
 Note:
Cost ofEnding BeginningPurchases =goods soldinventoryinventory
+ +
 
Number of daysNumber of daysOperating cycleof inventoryof receivables
= +
 
purchasesof daysof Numbersreceivableof daysof Numberinventoryof daysof NumbercycleoperatingNet
+=
 
2.
 
Liquidity
sliabilitieCurrentassetsCurrentratioCurrent
=
 
sliabilitieCurrentInventory-assetsCurrent ratioQuick 
=
 
SalessliabilitieCurrent-assetsCurrent ratiosalestocapitalworkingNet
=
 
3.
 
Profitability
Gross incomeGross profit marginSales
=
 
Operating incomeOperating profit margin =Sales
 Financial ratio formula sheet, prepared by Pamela Peterson-Drake 1
 
Net incomeNet profit marginSales
=
 
4.
 
 Activity
Inventorysoldgoodsof Cost turnoverInventory
=
 
receivable AccountscreditonSales turnoverreceivable Accounts
=
 
assetsTotalSales turnoverassetTotal
=
 
assetsFixedSales turnoverassetFixed
=
 
5.
 
Financial leverage
assetsTotaldebtTotal ratioassetstodebtTotal
=
 
assetsTotaldebtterm-Long  ratioassetstodebtterm-Long
=
 
equityrs'shareholdeTotal debtTotal ratioequitytodebtTotal
=
 
Total assetsEquity multiplier =Shareholders' equity
 
InteresttaxesandinterestbeforeEarnings  ratiocoverage-interest-Times
=
 
paymentLeaseInterestpaymentLeasetaxesandinterestbeforeEarnings  ratiocoveragecharge-Fixed
++=
 Financial ratio formula sheet, prepared by Pamela Peterson-Drake 2

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