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Days Inventory Outstanding =
(Average Inventory / Cost of Goods Sold) x
365

Loan Deposit Ratio =

(Total Loans / Total Deposits) x 100%

Net Interest Margin =

(Interest Income - Interest Expense) / Average
Earning Assets

Capital Adequacy Ratio =

(Tier 1 Capital + Tier 2 Capital) / Risk-
Weighted Assets

Operating Expenses to Operating Income

Ratio (BOPO) =
(Operating Expenses / Operating Income) x
100%

Non-Performing Loan Ratio =

(Non-Performing Loans / Total Loans) x
100%

Average Transaction Multiple Ratio = Total

Revenue / Number of Transactions

RWA = Asset Amount x Risk Weight

NWC = Curent assets - Curent labilités

 Explanation of Each Formula

2 • ROE (Return on Equity): It's a measure of how much profit a company generates for every dollar of shareholder's equity. For
example, if a company has a net income of $100 and shareholder's equity of $500, then the ROE would be 20% ($100/$500).
• NPM (Net Profit Margin): It's a measure of how much profit a company earns for every dollar of revenue. For example, if a company
has a net income of $100 and revenue of $1000, then the NPM would be 10% ($100/$1000).
• EBIT Margin (Earnings Before Interest and Taxes Margin): It's a measure of a company's operating profit margin, which shows how
much profit a company makes after paying for its operating expenses. For example, if a company has EBIT of $100 and revenue of
$1000, then the EBIT margin would be 10% ($100/$1000).
• EBITDA Margin (Earnings Before Interest, Taxes, Depreciation, and Amortization Margin): It's a measure of a company's operating
profit margin that shows how much profit a company makes before accounting for certain expenses. For example, if a company has
EBITDA of $100 and revenue of $1000, then the EBITDA margin would be 10% ($100/$1000).
• Asset Turnover: It's a measure of how efficiently a company is using its assets to generate revenue. For example, if a company has
revenue of $1000 and total assets of $5000, then the asset turnover would be 0.2 ($1000/$5000).
• ROA (Return on Assets): It's a measure of how much profit a company generates for every dollar of assets. For example, if a
company has a net income of $100 and total assets of $1000, then the ROA would be 10% ($100/$1000).
• Cashflow to Sales Ratio: It's a measure of how much cash a company generates for every dollar of revenue. For example, if a
company has operating cash flow of $100 and revenue of $1000, then the cashflow to sales ratio would be 10% ($100/$1000).

3 • Equity Ratio: It's a measure of how much of a company's assets are funded by equity (shareholders' equity). For example, if a
company has total assets of $1000 and shareholders' equity of $500, then the equity ratio would be 50% ($500/$1000).
• Gearing: It's a measure of how much of a company's assets are funded by debt. For example, if a company has total assets of $1000
and total debt of $500, then the gearing would be 50% ($500/$1000).
• Capex Ratio: It's a measure of how much a company is spending on capital expenditures (i.e., buying or upgrading fixed assets)
relative to its revenue. For example, if a company has capex of $100 and revenue of $1000, then the capex ratio would be 10%
($100/$1000).
• Cash Burn Rate: It's a measure of how quickly a company is using up its cash reserves. For example, if a company has $1000 in cash
reserves and is spending $100 per month, then the cash burn rate would be $100 per month.
• Current Asset to Assets Ratio: It's a measure of how much of a company's assets are in the form of current assets (i.e., assets that
can be converted into cash
• Non-Current Assets to Assets Ratio: This ratio helps us understand what percentage of a company's assets are non-current or long-
term assets, such as property, plant, and equipment. A higher ratio indicates that a company has invested more in long-term assets
rather than short-term assets.
• Equity to Fixed Assets Ratio: This ratio helps us understand what percentage of a company's fixed assets are financed by equity. A
higher ratio indicates that a company is relying more on equity to finance its fixed assets rather than debt.

4 • DSO (Days Sales Outstanding): This ratio helps us understand how many days it takes a company to collect its accounts receivable. A
lower DSO indicates that a company is collecting its receivables more quickly, which is a good sign.
• DPO (Days Payable Outstanding): This ratio helps us understand how many days it takes a company to pay its accounts payable. A
higher DPO indicates that a company is taking longer to pay its suppliers, which can be a good thing for cash flow.
• Cash Ratio: This ratio helps us understand a company's ability to pay off its current liabilities with its cash and cash equivalents. A
higher ratio indicates that a company has enough cash to cover its current liabilities.
• Quick Ratio: This ratio helps us understand a company's ability to pay off its current liabilities with its quick assets (cash, cash
equivalents, and accounts receivable). A higher ratio indicates that a company has enough quick assets to cover its current liabilities.
• Current Ratio: This ratio helps us understand a company's ability to pay off its current liabilities with its current assets (cash, cash
equivalents, accounts receivable, and inventory). A higher ratio indicates that a company has enough current assets to cover its
current liabilities.
• Inventory Turnover: Inventory turnover is a measure of how efficiently a company is managing its inventory. It is calculated by
dividing the cost of goods sold by the average inventory for a given period. For example, if a company has $500,000 in cost of goods
sold and an average inventory of $100,000, its inventory turnover would be 5
• Inventory Days: Inventory days is a measure of how many days it takes a company to sell its inventory. It is calculated by dividing the
average inventory for a given period by the cost of goods sold per day. For example, if a company has an average inventory of
$100,000 and a cost of goods sold per day of $2,500, its inventory days would be 40.
 Explanation of Each Formula
N • Days Inventory Outstanding (DIO) is a measure of how many days, on average, it takes for a company to sell its inventory. For
o example, if a company has 100 units of inventory and sells 10 units per day, then its DIO is 10 days.
t • Loan to Deposit Ratio (LDR) is a measure of how much a bank is lending compared to how much it has in deposits. For example, if a
bank has $100 million in deposits and has lent out $80 million, then its LDR is 80%
i • Net Interest Margin (NIM) is a measure of how much money a bank makes on its loans compared to how much it pays out in interest
n on its deposits. For example, if a bank earns $10 million in interest on its loans and pays out $5 million in interest on its deposits,
then its NIM is 5%.
• Capital Adequacy Ratio (CAR) is a measure of a bank's ability to absorb losses. It compares a bank's capital (i.e. the money it has set
b
aside to cover losses) to its risk-weighted assets (i.e. the assets that are more likely to result in losses). For example, if a bank has
o $10 million in capital and $100 million in risk-weighted assets, then its CAR is 10%. The formula for CAR is:
o • Operating Expenses to Operating Income Ratio (BOPO) is a measure of how much a company spends on operating expenses (i.e.
k salaries, rent, utilities, etc.) compared to how much it earns in operating income. For example, if a company spends $10 million on
operating expenses and earns $20 million in operating income, then its operating expenses to operating income ratio is 50%.
• Average Transaction Multiple Ratio (ATMR) is a measure of how much a customer spends per transaction on average. For example,
if a store has 100 customers and earns $1000 in revenue, then its average transaction multiple is $10
• Risk Weighted Assets (RWA) is a measure of how risky a bank's assets are. For example, a bank's assets might include loans to
borrowers with different credit scores. The riskier the borrower, the higher the risk-weight assigned to the loan
• Net Working Capital (NWC) is a measure of a company's short-term liquidity or ability to meet its current financial obligations. It is
calculated by subtracting current liabilities from current assets