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HB 311: Exam 1
Current Ratio |
Current assets/ Current Liabilities
The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months. |
Quick Ratio |
Current Assets- Inventory/Current Liabilities
In finance, the Acid-test or quick ratio or liquid ratio measures the ability of a company to use its near cash or quick assets pay its current liabilities immediately. |
Average Collection Ratio |
Accounts Receivable/ Avg. Daily Sales
or (Accounts Receivable/Sales) x 360
Average number of days it takes to collect receivables |
Inventory Turnover Ratio |
COGS/Inventory
Whether the firm has excess funds tied up in inventory |
Fixed Asset Turnover Ratio |
Sales/ Fixed Assets |
Total Asset Turnover Ratio |
Sales/ Total Assets |
Debt Ratio |
(Long-term Debt + Current Liabilities)/ Total Assets
Debt Ratio is a financial ratio that indicates the percentage of a company's assets that are provided via debt. |
Debt to Equity Ratio |
Long Term Debt: Equity
The proportion of shareholders' equity and debt used to finance a company's assets. |
Times Interest Earned |
EBIT/ Interest
A measure of a company's ability to honor its debt payments before interest and taxes. |
Cash Coverage Ratio |
(EBIT + Lease Payments)/ (Interest + Lease Payments) |
EBITDA Coverage |
(EBIT + Lease Payments)/ (Interest + Lease Payments + Principal Repayment) |
ROS/ Profit Margin |
Net Income/ Sales |
ROA |
Net Income/ Total Assets |
ROE |
Net Income/ Equity |
EPS |
Net Income/ # Shares of Common Stock Outstanding |
P/E Ratio |
Stock Price/ EPS |
ROA (Du Pont) |
ROS X Total Asset Turnover |
ROE (Du Pont) |
ROA X Equity Multiplier |
Cash From Operating Activities |
Net Income
Depreciation
Net Changes in Current Accounts |
Cash From Investing Activities |
Purchase of Fixed Assets |
Cash From Financing Activities |
Decrease in LTD
Sale of Stock
Dividend Paid |
Net Changes in Current Accounts |
Receivables
Inventory
Payables
Accruals |
Gross Margin |
Gross Margin |
EBIT |
Gross Margin - All Expenses |
Net Income |
EBIT - Tax |
Total Equity |
common + Preferred Equity |
Total Capital |
Long Term Debt + Equity |
Total Effective Tax Rate |
Tf + Ts(1-Tf) |
Restated Corporate Tax |
rate(1-marginal tax rate) |
Asset Increase (Rule) |
Use |
Liability Increase (Rule) |
Source |
Asset Decrease |
Source |
Liability Decrease |
Use |
Net Operating Profit |
EBIT - (T)(EBIT)= EBIT (1-T) |
Operating Cash Flow |
Net Operating Profit + Depreciation |
Free Cash Flow |
Operating Cash Flow
- increase in gross fixed assets
- increase in current accounts |