Ratios Flashcards
Ratios from all the lessons (30 cards)
market-to-book ratio
market value (per share)/ book value (per share) OR market value/ book value
market value
market to book ratio x book value
goodwill
takeover price - book value ((price paid per share - book value per share) x no. of shares bought) (total price paid - book value of shares bought)
total takeover amount
goodwill + financial assets
group profit
profit hunter + profit target - minority interest
earnings per share (EPS)
net income / no. of shares
price to earnings ratio (P/E ratio)
market price of a share / EPS
Liquidity ratios
current ratio, quick ratio, net working capital
current ratio
current assets/ current liabilities
quick ratio
(current assets - inventory) / current liabilities
net working capital
current assets - current liabilities
Leverage ratios
debt ratio, debt to equity ratio, times interest earned
debt ratio
total debt/ total assets
debt to equity ratio
total debt/ total equity
times interest earned
EBIT/ interest costs
profitability ratios
return on equity, return on debt, return on investment, margin on sales
return on equity (ROE)
annual profit/ equity
return on debt
annual interest/ total debt
return on investment
annual EBIT/ total investment (=equity + debt)
margin on sales
annual EBIT/ sales
ROE/ leverage effect
ROI + (ROI - ROD) x (debt/ equity)
Activity ratios
average collection period, average inventory period, turnover rate
average collection period
accounts receivable/ annual sales x 365 days
average inventory period
inventory level/ annual cost of sales x 365 days
