Liquidity Ratios + Profitability Ratios Flashcards
current ratio
current ratio = current assets / current liabilities
quick ratio
quick ratio = (cash + receivables + marketable securities) / current liabilities
cash ratio
cash ratio = (cash + marketable securities) / current liabilities
defensive interval
defensive interval = ( cash + receivables + marketable securities) / average daily expenditures
net profit margin
net profit margin = net income / revenue
gross profit margin
gross profit margin = gross profit / revenue
operating profit margin
operating profit margin = operating income OR EBIT / revenue
pretax margin
pretax margin = EBT / revenue
ROA
ROA = net income / average total assets
interest adjusted ROA
ROA = ( net income + interest expense* (1- t ))/ average total assets
operating return on asset
operating return on asset = operating income OR EBIT / average total assets
return on total capital
return on total capital = EBIT / total capital
total capital
total capital = short and long term debt + preferred equity + common equity
ROE
ROE = net income / average total equity
return on common equity
return on common equity = (net income - preferred dividends) / average total equity
Dupont
return on equity = net profit margin × asset turnover × leverage ratio
Dupont
