5

Financial
Ratio -
Guide
1
Profitability Ratio

A. Return Ratio
Return on Equity
Return on Assets
Return on Capital Employed

B. Margin Ratio
Gross Margin Ratio
Operating Profit Margin
Net Profit Margin
 A. Return Ratio
Return on Equity
Return on Assets
Return on Capital Employed
 B. Margin ratio
Gross Margin Ratio
Operating Profit Margin
Net Profit Margin
2 Leverage Ratio
Debt-to-Equity Ratio
Equity Ratio
Debt Ratio
3 Efficiency Ratio
Accounts Receivable Turnover Ratio
Accounts Receivable Days
Asset Turnover Ratio
Inventory Turnover Ratio
Inventory Turnover Days

Net Credit Sales = Sales on Credit – Sales Returns – Sales Allowances Average
Accounts Receivable = (Accounts Receivable at ending + Accounts Receivable at beginning)/2

Accounts Receivable Turnover Ratio = Net Credit Sales/Average Accounts Receivable

Average Total Assets = (Total Assets at ending + Total Assets at beginning)/2

Average Inventory = (Inventoryending + Inventorybeginning)/2

Inventory Turnover Ratio = Cost of Goods Sold/Average Inventory

4 Liquidity Ratio
A. Asset Ratio
Current Ratio
Quick Ratio
Cash Ratio
Defensive Interval Ratio

B. Earnings Ratio
Times Interest Earned Ratio

C. Cash Flow Ratio

Times Interest Earned (Cash Basis) Ratio
CAPEX to Operating Cash Ratio
Operating Cash Flow Ratio
 A. Asset Ratio
Current Ratio
Quick Ratio
Cash Ratio
Defensive Interval Ratio

Daily expenditures = (annual operating expenses – non-cash charges)/365

 B. Earnings Ratio
Times Interest Earned ratio

C. Cash Ratio
Times Interest Earned (Cash Basis) Ratio
CAPEX to Operating Cash Ratio
Operating Cash Flow Ratio

Adjusted Operating Cash Flow = Cash Flow from Operations + Taxes + Fixed Charges
5
Valuation Ratio

A. Price Ratio
Price-to-Earnings Ratio

B. Enterprise Value
Ratio
EV/EBITDA Ratio
EV/EBIT Ratio
EV/Revenue Ratio
 A. Price Ratio
Price-to-Earnings Ratio

Earnings per Share = (Net Income – Preferred Dividends)/Weighted Avg. Shares Outstanding

B. Enterprise Value Ratio

EV/EBITDA Ratio
EV/EBIT Ratio
EV/Revenue Ratio
Market Capitalization = Share Price x Number of Shares
Net Debt = Market Value of Debt – Cash and Cash Equivalents
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