Solvency - checks how long a company can pay

profitability - determine how profitable the company is

gross profit ratio - gross profit/ net sales
gross profit = sales-cogs
return on sales = net income/net sales
return on asset = net income/ave total asset
retun on stockholders equity = net income/ave stockholders equity

liquidity ratio - analysis of balance sheet items; measurement how liquid a company is
current ratio = current asset / current liability
acid test ratio = current assets - inventory/current liability
net working capital = current assets - current liability

management efficiency ratios

receivable turnover = net credit sale/ ave AR
days sales outstanding = 360/receivable turnover
inventory turnover = cogs/ave inventory
days inventory turnover = 360/inventory turnover
AP turnover = net credit purchases/ave AP
days payable outstanding = 360/AP turnover

operating cycle = Days inventory outstanding+days sale outstanding

cash conversion cycle = (days inventory outstanding+days sales outstanding)-Days payable outstanding
total asset turnover = net sales/ave total assets

leverage ratios
debt ratio =total liability/total assets
equity ratio = total equity/total assets
debt-equity ratio = total liability/total equity

growth ratios
times interest earned - earning before interest and taxes/interest expense
earnings/share = earnings/shares = net income - (preferred dividends)/share
price earning ratio = price/earning
dividend payout ratio = dividend/earning
dividend yield ratio = dividend/price per share(market price)
book value per share = book value/ave common shares

CVP Analysis
CM ratio = CM/sales
VC ratio= VC/sales
Breakeven sales =fixed cost/CM ratio
breakeven unit = fixed cost/CM per unit
target profit sales = (fixed cost+target profit)/CM ratio
target profit units = (fixed cost+target profit)/CM per unit
Degree of operating leverage = CM/net income