TO EVALUATE SHORT-TERM FINANCIAL POSITION (SHORT-TERM SOLV
1. Total Current Assets
Current ration =
Total Current Liabilities
2. Total Quick Assets
Acid-test ratio or Quick ratio =
Total Current Liabilities
Total Quick Assets = Cash + Marketable Securities + Accounts Re
3. Working Capital
Working Capital to Total assets =
Total Assets
Working Capital = Current Assets - Current Liabilities
4. Cash + Marketable Securities + Cash Flow from O
Cash Flow Liquidity ratio =
Current Liabilities
5. Quick Assets
Defensive Internal ratio =
Projected Daily Operational Expense
TO EVALUATE ASSET LIQUIDITY AND MANAGEMENT EFF
1. Net credit sales or Net sales
Trade Receivable Turnover =
Average Trade Receivables (net)
Working Capital = A/R - AFDA
Average Collection 360 days
period Receivable Turnover
or or
Number of days' Accounts Receivable
sales uncollected = Net sales
360 days
2. Inventory Turnover
Cost of goods sold
Merchandise Turnover =
Average Mechandise Inventory
Cost of goods sold
Finished Goods Inventory =
Average FG Inventory
Cost of goods manufactured
Goods in process turnover =
Average Goods in process Inventory
RM used
Raw materials turnover =
Average RM Inventory
RM used
Days supply in inventory =
Average RM Inventory
3. Net Sales
Working Capital turnover =
Average Working Capital
4. Percent of each current asset Amount of each current asset item
to total current assets = Total Current Assets
5. Cost of Sales + Operating Expenses + Income Taxes
Current assets turnover =
Averag
6. Net purchases
Payable turnover =
Average Accounts Payable
7. Operating Cycle = Average Conversion Period of Inventories +
8. Average Cash Balance
Days Cash = Cash Operating Costs
360 days
9. Free Cash Flow = Net cash from operating activities -
10. Net Sales
Investment or Asset turnover =
Average Total Investment or Total Assets
11. Sales to fixed assets Net Sales
(Plant assets turnover) = Average Fixed Assets (net)
12. Total Assets
Capital Intensity ratio =
Net Sales
TO EVALUATE LONG-TERM FINANCIAL POSITION OR STABILIT
1. Total Liabilities
Debt ratio =
Total Assets
2. Total Equity
Equity ratio =
Total Assets
3. Total Liabilities
Debt to Equity ratio =
Total Equity
4. Fixed Assets to Fixed Assets (net)
Long-term Liabilities = Total Long-term Liabilities
5. Fixed Assets to Fixed Assets (net)
Total equity = Total Equity
6. Fixed Assets to Fixed Assets (net)
Total Assets = Total Assets
7. Book value per share Ordinary shareholders' equity
of ordinary shares = No. of outstanding shares
8. Net Income before Interest and Taxes
Times interst earned =
Annual Interest Charges
9. Times preferred dividend Net Income After Taxes
requirement earned = Preferred Dividends Requirement
10. Net Income before Taxes and Fix
Times fixed charges earned =
Fixed Charges (Rent + Interest +
Sinking Fund payment befor
Sinking Fund payment before taxes =
1 - Tax rate
TO MEASURE PROFITABILITY AND RETURNS TO INVES
1. Gross Profit
Gross Profit Margin =
Net Sales
2. Operating Profit
Operating Profit Margin =
Net Sales
3. Net profit margin Net Profit
(Rate or return on net sales) = Net Sales
4. Cash Flow for operating activities
Cash Flow Margin =
Net Sales
5. Net Profit
Rate of retun on assets (ROA) =
Average Total Assets
Alternative Formula: Asset Turnover x Net Profit Margin
Net Income + [Interest expense (
If there is interest-bearing debt:
Average Total Assets
6. Net Income
Rate of return on equity =
Average Ordinary Equity
Alternative Formula: Return on Assets x Equity Multiplier
1
Equity Multiplier:
Equity Ratio
7. Net income - preference dividends requirement
Earning per share =
Average ordinary shares outstanding
8. Market Value per Share of Ordinary Shares
Price / earning ratio =
Earnings per share of Ordinary Shares
9. Dividends per share
Divident Payout =
Earnings per share
10. Annual Dividends per share
Dividend Yield =
Market Value per share of Ordinary Shares
11. Dividends Paid / Declared
Dividends per share =
Ordinary Shares Outstanding
12. Rate of return on Net Income
average current assets = Average Current Assets
13. Rate of return per Rate of return in Average current assets
turnover of current assets = Current Assets turnover
ON (SHORT-TERM SOLVENCY AND LIQUIDITY)
Current Assets - Inventories
Quick ratio =
Total Current Liabilities
Securities + Accounts Receivable
ssets - Current Liabilities
urities + Cash Flow from Operating Act
urrent Liabilities
Quick Assets
aily Operational Expenses
AND MANAGEMENT EFFICIENCY
edit sales or Net sales
Trade Receivables (net)
A/R - AFDA
* green means compute first*
Sales
Inventory Turnover =
Inventories
Net Income
Profit Margin =
Net Sales
manufactured
process Inventory
urrent asset item
ent Assets
Expenses + Income Taxes + Other Expenses (net) (excluding depreciation & amortization)
Average Current Assets
on Period of Inventories + Average Collection Period of Receivable + Days cash
* green means compute first*
rom operating activities - Cash used in investing activities and Dividends
ales
ment or Total Assets
POSITION OR STABILITY / LEVERAGE
Total Liabilities
Debt to Asset ratio =
Total Assets
nterest and Taxes Operating profit
Times interest earned =
est Charges Interest expense
After Taxes
ds Requirement
ome before Taxes and Fixed Charges
nt + Interest + Sinking Fund payment before taxes)
nking Fund payment before taxes
1 - Tax rate
AND RETURNS TO INVESTORS
erating activities
ales
nover x Net Profit Margin
ome + [Interest expense (1 - Tax rate)]
Average Total Assets
Assets x Equity Multiplier
1
Equity Ratio
dividends requirement
hares outstanding
e of Ordinary Shares
of Ordinary Shares
nds per share
e of Ordinary Shares
rage current assets
ets turnover
