Chapter 4 Formulas.pdf - Chapter 4 Formulas Current ratio=...

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Chapter 4 Formulas Current ratio= Current assets Current liabilities Quick or acid test ratio= Current assets - Inventories Current liabilities Inventory turnover = Cost of goods sold Inventories Days sales outstanding (DSO) = Receivables Average sales per day = Receivables Annual sales 365 Fixed asset turnover = Sales Net fixed assets Total asset turnover = Sales Total assets Total-debt-to-total-capital-ratio = Total debt Total capital = Total debt Total debt + Equity Debt-to-equity ratio = Total debt Equity Times interest earned = EBIT Interest charges EBITDA coverage = EBITDA + Lease payments Interest + principal payments + Lease payments Times interest earned = EBIT Interest charges Operating margin= EBIT Sales Profit margin = Net income Sales Return on total assets (ROA) = Net income
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