Ratio's by ambarish1987

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									Profitability ratios
Profitability ratios measure the firm's use of its assets and control of its expenses to generate an acceptable rate of return.
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Gross margin Profit margin Operating margin or Operating income margin = Operating income / Net sales[7] Net margin Gross profit margin or Gross profit rate = (Net sales - Cost of goods sold) / Net sales[8] Operating profit margin or Return on Sales (ROS) = Earnings before interest and taxes / Sales[9][10] = Operating earnings / Net sales[11]

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Net profit margin = Net profits after taxes / Sales[12] Return on equity (ROE) = Net profits after taxes / Stockholders' equity or tangible net worth [13] = Net profit / Equity[14]

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Return on investment (ROI ratio or Du Pont ratio) = Net income / Total assets[15] Asset turnover = Sales / Assets[16] Return on assets (ROA) Return on net assets (RONA) Return on capital (ROC) Risk adjusted return on capital (RAROC) Return on capital employed (ROCE) Cash flow return on investment (CFROI) Efficiency ratio

[edit] Liquidity ratios
Liquidity ratios measure the availability of cash to pay debt.
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Current ratio = Current assets / Current liabilities[17] Acid-test ratio (Quick ratio) = (Current assets – Inventories) / Current liabilities[18] Receivables Turnover Ratio = Net credit sales/ Average net receivables[19] Inventory turnover ratio = Cost of goods sold / Average inventory[20][21]

[edit] Activity ratios
Activity ratios measure how quickly a firm converts non-cash assets to cash assets.

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Average collection period = Accounts receivable / (Annual credit sales / 360 days)[22] Collection period (period end) Average payment period = Accounts payable / (Annual credit purchases / 360 days)[23] Inventory turnover ratio = Cost of goods sold / Average inventory[24] Inventory conversion ratio = Inventory conversion to cash period (days) = 360 days / Inventory turnover[25] days Inventory cash conversion cycle

[edit] Debt ratios
Debt ratios measure the firm's ability to repay long-term debt. Debt ratios measure financial leverage.
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Debt ratio = Total liabilities / Total assets [26] Debt to assets ratio Debt to equity ratio = (Long-term debt + Value of leases) / Stockholders' equity[27] Long-term debt/Total asset (LD/TA) ratio = long-term debt / Total assets[28] Times interest-earned ratio = Earnings before interest and taxes EBIT / Annual interest expense[29] Debt service coverage ratio = Net operating income / Total debt service

[edit] Market ratios
Market ratios measure investor response to owning a company's stock and also the cost of issuing stock.
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Payout ratio = Dividend / Earnings[30], or = Dividend per share / Earnings per share[31] Note:Earnings per share is not a ratio, it is a value in currency. Earnings per share = Expected earnings / Number of outstanding shares[32]

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P/E ratio = Price / Earnings per share Cash flow ratio or Price/cash flow ratio = Price of stock / present value of cash flow per share[33] Price to book value ratio (P/B or PBV) = Price of stock / Book value per share[34] Price/sales ratio PEG ratio EV/EBITDA


								
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