Financial Analysis Techniques Flashcards
(39 cards)
The Operating income/Average total assets ratio shown above is one of many
versions of the __________.
return on assets (ROA) ratio
Net income divided by average shareholders’ equity
return on equity (ROE)
What is TTM? MRQ?
Trailing 12 months
TTM) and most recent quarter (MRQ
________ measure how efficiently a company performs dayto- day tasks, such as the collection of receivables and management
of inventory
Activity ratios
Inventory turnover
Cost of sales or cost of
goods sold / Average inventory
Days of inventory on hand
DOH
Number of days in
period / Inventory turnover
Receivables turnover
Revenue / Average receivables
Days of sales outstanding
DSO
Number of days in
period / Receivables turnover
Payables turnover
Purchases / Average trade payables
Number of days of payables
Number of days in
period /
period
Payables turnover
Working capital turnover
Revenue / Average working capital
Fixed asset turnover
Revenue / Average net fixed assets
Total asset turnover
Revenue / Average total assets
Defensive interval ratio
Cash + Short- term marketable investments +
Receivables / Daily cash expenditures
The ___________ , a financial metric not in ratio form, measures the
length of time required for a company to go from cash paid (used in its operations)
to cash received (as a result of its operations).
cash conversion cycle
____________ results from the use of fixed costs in conducting the company’s business.
Operating leverage
Debt- to- capital ratio
Total debt / (Total debt + Total shareholders’
equity)
Interest coverage
EBIT/Interest payments
Fixed charge coverage
(EBIT + Lease
payments) / (Interest payments + Lease payments)
Operating profit margin
Gross profit minus operating
costs / Revenue
Pretax margin
EBT / Revenue
Operating ROA
Operating income / Average total assets
ROA
Net income / Average total assets
Return on total capital
EBIT / Average short- and
long- term debt and
equity
