Total debt to total capital ratio total debt to debt

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Total debt to total capital ratio = Total debt to debt equity Debt ratio = Total debt to total assets Equity multiplier = total assets to total common equity Profitability ratios show how successfully a company is operating and show the combined e ff ects of liquidity, asset management, and leverage. Operating margin = Operating income to sales Profit margin = Net income to sales Return on assets (ROA) = Net income to total assets Return on Equity (ROE) = Net income to total common equity DuPont analysis is an expression which breaks down ROE, and illustrates how it can be seen as a combination of other ratios. Return on Equity (ROE) = Profit margin x Total asset turnover x Equity multiplier Market value ratios reveal how investors feel about a firm based on its market price. Market-to-book Ratio = Market price to book value (book value = common equity / shares outstanding) If the ratio is >1 the stock is undervalued Price-to-earnings (P/E) Ratio = Market value per share to Earnings per share.
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Intrinsic value of a stock = earnings per share x P/E ratio
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  • Fall '08
  • BESLEY
  • Balance Sheet, Financial Ratio, Generally Accepted Accounting Principles

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