FORMULAE/ RATIOS

1. Full Capacity of Sales= Current Sales

Current Capacity Utilization

2. Capital Intensity Ration = Total Assets

Full Capacity of Sales

3. Current Capital Utilization = Current Sales

Total Capacity Sales

4. Additional Growth without Additional asset bought = Full Capacity of Sales -1

Current Capacity Sales

ROE  b
6. Sustainabl e Growth Rate 
1 - ROE  b

ROA  b
7. Internal Growth Rate 
1 - ROA  b

Net Income
8. Return on Assets 
TotalAssets

Net Income
9. Return on Equity 
Total Equity  Retained Earning
 Cash Dividends
10. Dividend Payout Ratio 
Net Income

Addition t o Retained Earnings

11. Retention Ratio/Plow back Ratio 
Net Income

12. Retention Ratio = (1 - Dividend Payout Ratio)

13. Dividend Payout Ratio = (1- Retention Ratio)

14. ROE = Profit Margin x Total Asset Turnover x Equity Multiplier

Net Sales
15. Total Asset Turnover 
Total Assets

1
16. Total Asset Turnover 
Capital Intensity Ratio

17. Equity Multiplier = (1+ Debt Equity Ratio)

Total Long - term Debt

18. Debt Equity Ratio 
Total Equity

19. Increase In Total Assets = A x g

A= Assets

g= Growth in Sales
20. Addition to Retained Earning/Projected or Proforma Retained Earning = p(S)R x (1+g)

Current Sales x Profit Margin x (1+ sales growth)

21. Change in Retained Earning = Projected Sales x Profit Margin x Retention Ratio

22. Proforma dividends paid to shareholders = Proforma Net Income x Dividend Payout Ratio

23. Proforma Addition to Retained Earnings = Profo