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  • Financial Readings 5 - Scribd

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    Sanjay Kumar
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    This document defines key financial metrics used to evaluate companies including debt-to-equity ratio, gross profit, gross profit margin, customer acquisition cost, customer churn rate, customer lifetime value, net profit, net profit margin, and return on equity. It also outlines the components of cost of goods sold, operating expenses, and earnings before interest, taxes, depreciation, and amortization.

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    This document defines key financial metrics used to evaluate companies including debt-to-equity ratio, gross profit, gross profit margin, customer acquisition cost, customer churn rate, customer lifetime value, net profit, net profit margin, and return on equity. It also outlines the components of cost of goods sold, operating expenses, and earnings before interest, taxes, depreciation, and amortization.

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    © All Rights Reserved
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    5 views2 pages

    Financial Readings 5 - Scribd

    Uploaded by

    Sanjay Kumar
    This document defines key financial metrics used to evaluate companies including debt-to-equity ratio, gross profit, gross profit margin, customer acquisition cost, customer churn rate, customer lifetime value, net profit, net profit margin, and return on equity. It also outlines the components of cost of goods sold, operating expenses, and earnings before interest, taxes, depreciation, and amortization.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 2

    1.

    Debt/Equity= Total Borrowings/ Shareholders equity, should not be more than 2


    2. Gross profit= Revenue- COGS
    3. Gross profit margin= (Gross profit/Revenue)*100
    4. Gross burn, expenses like salaries, rent, office supplies over a fixed period
    5. Net burn= Gross burn- Monthly revenue
    6. Cash runway= Total Cash/ Avg. Net burn, no. of months before the company runs out of money
    7. Customer Acquisition cost, CAC= Sales & Marketing cost/ No. of customer acquired
    8. Customer Churn rate= (Lost customers)/ Customer at the beginning
    9. CLTV= (Customer value x Avg. Customer lifespan)
    i. Customer value= (Avg. purchase value x Avg. frequency rate)
    ii. Avg. purchase value= Total purchase value/ No. of purchases
    iii. Avg. frequency rate= Total no. of purchases/ Total no. of customers
    10. Net profit= Revenue-(COGS+ All operating & non-operating expenses| excluding D&A, interest & Taxes)
    11. Net profit margin= Net profit/ Total Revenue
    12. COGS= year’s opening inventory +purchase – year’s closing inventory
    13. Expenses,
    1. Marketing, Advertising, Promotional expenses
    2. General & Administrative expenses
    3. Depreciation & Amortization expenses
    4. Interest
    5. Tax
    14. EBITDA, EBIT & EBT
    1. ROE= Net income/ Total Equity

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