SUMMARY OF RATIOS - Fixed Charge Coverage Ratio = EBIT +...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
SUMMARY OF RATIOS Liquidity Ratios Show the relationship of firm’s cash and other current assets to current liabilities. Provide indication of firm’s ability to meet its current obligations. Current Ratio = Current Assets Current Liabilities Quick (Acid Test) Ratio = Current Assets-Inventories Current Liabilities Asset Management Ratios Measures how effectively firm is managing its assets Inventory Turnover Ratio = Cost of Goods Sold Inventories Days Sales Outstanding (DSO) = Receivables Annual sales 360 Fixed Assets Turnover Ratio = Sales Net Fixed Assets Total Assets Turnover = Sales Total Assets Debt Management Ratios Measures the use of debt financing. Indication of leverage. Debt Ratio = Total Debt Total Assets
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Times Interest Earned Ratio = EBIT Interest Charges
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Fixed Charge Coverage Ratio = EBIT + Lease Payments Interest Charges +Lease Payments + Sinking fund payments (1- tax rate) Profitability Ratios Effect of liquidity, asset management and debt management on operating results. Net Profit Margin = Net Income Sales Return on Assets (ROA) = Net Income Total Assets Return on Common Equity (ROE) = Net income available to common stockholders Number of common shares O/S Market Value Ratios Relate stock price to its earnings and book value per share. What investors think of companys future prospects based on past performance. Price/Earnings Ratio = Market price per share Earnings per share Price/Book Ratio = Market price per share Book value per share...
View Full Document

This note was uploaded on 04/12/2008 for the course BUS 320 taught by Professor Sloan during the Fall '08 term at N.C. State.

Page1 / 2

SUMMARY OF RATIOS - Fixed Charge Coverage Ratio = EBIT +...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online