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Financial Ratios for Analysts

useful for Beginner level accounting class

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jiaxin.liu.2021
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64 views1 page

Financial Ratios for Analysts

useful for Beginner level accounting class

Uploaded by

jiaxin.liu.2021
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Summary of Ratios Used in This Book


Chapter Calculations
RISK RATIOS
Liquidity

Net credit sales


Receivables turnover ratio 5
Average accounts receivables

365 days
Average collection period 5
Receivables turnover ratio

Cost of goods sold


Inventory turnover ratio 6
Average inventory

365 days
Average days in inventory 6
Inventory turnover ratio

Current assets
Current ratio 8
Current liabilities

Cash + Current investments + Accounts receivable


Acid-test ratio 8
Current liabilities

Solvency
Total liabilities
Debt to equity ratio 9
Stockholders’ equity

Net income + Interest expense + Tax expense


Times interest earned ratio 9
Interest expense

PROFITABILITY RATIOS
Gross profit
Gross profit ratio 6
Net sales

Net income
Return on assets 7
Average total assets

Net income
Profit margin 7
Net sales

Net sales
Asset turnover 7
Average total assets

Net income
Return on equity 10
Average stockholders’ equity

Dividends per share


Dividend Yield 10
Stock price

Net income − Dividends on preferred stock


Earnings per share 10
Average shares of common stock outstanding

Stock price
Price-earnings ratio 10
Earnings per share

S-1

spi14895_chsum_S1-S4.indd S-1 06/26/18 01:12 PM

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