FinStmtAnalysis - = EBIT Total Assets • Return on...

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Financial Statement Analysis FINC 3630 Yost Financial Statement Analysis Liquidity Ratios Current Ratio = Current Assets / Current Liabilities Quick Ratio = (Current Assets–Inventory) / Current Liabilities Asset Management Ratios Inventory Turnover = Sales / Inventory Days Sales Outstanding (DSO Days Sales Outstanding (DSO) = Accounts Receivable / (Sales / 365) Fixed Assets Turnover = Sales / Fixed Assets Total Asset Turnover = Sales / Total Assets
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Financial Statement Analysis FINC 3630 Yost Debt Management Ratios Debt Ratio = Total Liabilities / Total Assets Equity Multiplier = Total Assets / Total Equity Debt Equity Ratio = Total Liabilities / Total Equity Times Interest Earned (TIE) Ratio = EBIT / Interest EBITDA Coverage = (EBITDA + Lease Payments) / (Interest + Principal + Lease Payments) Profitability Ratios Profit Margin = Net Income / Sales Basic Earning Power (BEP Basic Earning Power (BEP)
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Unformatted text preview: = EBIT / Total Assets • Return on Assets (ROA) = Net Income / Total Assets • Return on Equity (ROE) = Net Income / Total Equity Market Value Ratios • Price/Earnings (PE) Ratio = Price per share / Earnings per share Price/Cash Flow • = Price per share / Cash flow per share • Book Value Per Share = Total Common Equity / # Shares • Market ‐ to ‐ Book (M/B) Ratio = Market value per share / book value per share Financial Statement Analysis FINC 3630 ‐ Yost DuPont Identity • ROE = Profit Margin x Total Asset Turnover x Equity Multiplier Summary • What can we do with financial ratios? • What are limitations to ratio analysis? Suggested Problems • Questions: – 8 ‐ 3 through 8 ‐ 6 • Problems: – 8 ‐ 2, 8 ‐ 4 through 8 ‐ 6, 8 ‐ 8 through 8 ‐ 10, and 8 ‐ 13...
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This note was uploaded on 12/11/2011 for the course FINC 3630 taught by Professor Jensen,m during the Summer '08 term at Auburn University.

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FinStmtAnalysis - = EBIT Total Assets • Return on...

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