Financial Ratios List - PDF

					                             How to Calculate Financial Ratios


Below is a list of several useful formulas for calculating financial ratios. There are four
major types of ratios. They will all prove especially helpful when developing your case
analyses.

PROFITABLILTY RATIOS
Gross profit margin:                                      Sales – Cost of good sold
                                                                   Sales
Operating profit margin:                          Profits before taxes and before interest
                                                                   Sales
Net profit margin:                                           Profits after taxes
                                                                   Sales
Return on total assets:                                      Profits after taxes
                                                                Total assets
Return on stockholder’s equity:                             Profits after taxes
                                                         Total stockholders equity
Return on common equity:                  Profits after taxes-Preferred stock dividends
                                  Total stockholders’ equity- Par value of preferred stock
Earnings per share:                           Profits after taxes-Preferred stock dividends
                                             Number of shares of common stock outstanding
LIQUIDITY RATIOS


Current ratio:                                                  Current assets
                                                               Current liabilities
Quick ratio:                                               Current assets -Inventory
                                                              Current liabilities
Inventory to net working capital:                                 Inventory
                                                       Current assets -Current liabilities
LEVERAGE RATIOS


Debt-to-assets ratio:                                             Total debt
                                                                  Total assets
Debt-to-equity:                                                    Total debt
                                                           Total stockholders’ equity
Long-term debt-to-equity ratio:                         Long-term debt
                                                   Total stockholders’ equity
Fixed-charge coverage:                          Profits before interest and taxes
                                                        Interest charges
Fixed-charge coverage:            Profits before taxes and interest+Lease obligations
                                       Total interest charges+Lease obligations
ACTIVITY RATIOS


Inventory turnover:                                          Sales
                                                  Inventory of finished goods
Fixed assets turnover:                                       Sales
                                                          Fixed assets
Total assets turnover:                                       Sales
                                                          Total assets
Accounts receivable turnover:                         Annual credit sales
                                                      Accounts receivable
Average collection period:                            Accounts receivable
                                                      Average daily status
OTHER RATIOS


Dividend yield on common stock:                  Annual dividends per share
                                                Current market price per share
Prince-earnings ratio:                          Current market price per share
                                                 After tax earnings per share
Dividend payout ratio:                            Annual dividends per share
                                                  After tax earnings per share
Cash flow per share:                            After tax profits+Depreciation
                                             Number f common shares outstanding

				
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