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Flashcards in Financial Ratios Deck (27):
1

Current Ratio

Current Assets/Current Liabilities

2

Quick Ratio

(Current Assets - Inventory)/Current Liabilities

3

Average Collection Period

AR/Daily Credit Sales

4

AR Turnover

Credit Sales/AR

5

Inventory Turnover

COGS/Inventory

6

Total Asset Turnover

Sales/Total Assets

7

Fixed Asset Turnover

Sales/Fixed Assets

8

Operating Income Return on investment

OIROI=Operating Income/Total Assets

9

Debt Ratio

Total Debt/Total Assets

10

Times Interest Earned

EBIT/Interest Expense

11

ROA

Net Income/Total Assets

12

ROE

Net Income/Total Equity

13

Gross Margin

Sales-COGS/Sales

14

Operating Margin

EBIT/Sales

15

Net Margin

Net Income/Sales

16

DuPont Equation

ROE=Net Profit Margin x Asset Turnover x Leverage Multiplier

17

ROIC (rtrn on invst cap)

NOPAT/ (Costly Capital)

18

NOPAT

NOPAT = EBIT-Cash Taxes

19

Free Cash Flow to the Firm

FCFF = EBIT - Cash Tax Payments + Depreciation - CAPEX - Increases in NWC

20

Cash Tax Payments

Cash Tax Payments = Total tax payments from the income statement

21

CAPEX

Capital Expenditure (gross property, plant, and equipment) changes from two balance sheets

22

NWC

NWC = Net Working Capital (current assets - current liabilities) changes from two balance sheets

23

FCFE

Free Cash Flow to Equity Holders = Net Income + Depreciation - CAPEX - Increases in NWC + Increases in Net Long-Term Debt

24

Leverage Multiplier

LM = Liabilities/Equity + 1

25

Dupont Equation

ROE= NI/S x S/A x (L/E + 1)

26

Economic Value Added

EVA=NOPAT - [WACC x (costly capital)]

27

Debt-to-Equity

Debt-to-Equity = Debt / Equity