FINANC IAL RATIO EQU ATIONS

Li qui di ty Rati os Capi tal Structure Rati os

Current Rati o = Current Assets D ebt Rati o = Total Debt

Current Liabilities Total Assets

Aci d Tes t Rati o = Current Assets - Inventory Ti mes Interes t = Net Operating Income or EBIT
Current Liabilities Earned Interest Expense

Av erage = Trade Receivables Profi tabi l i ty Rati os

Collection Peri od Annual Credit Sales/365 days
Gros s Profi t = Gross Profit
Trade = Annual Sales M argi n Revenues
Recei v abl es Trade Receivables
Turnov er
O perating Profit = Net Operating Income or EBIT
As s et M anagement Effi ci ency Rati os M argi n Revenues

Total As s ets = Sales Net Profi t = Net Income

Turnov er Total Assets M argi n Revenues

Fi xed As s ets = Revenues O perati ng = Net Operating Income or EBIT

Turnov er Net Plant and Equipment Return on Total Assets
As s ets

M arket Val ue Rati os Return on = Net Income

Equi ty Common Equity
Pri ce Earni ngs = Market Price per Share
Rati o Earnings per Share

M arket-to-Book = Market Price per Share

Rati o Book Value per Share

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