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