Ratios
Liquidity
Debt
Asset
Profit
Returns
Current Ratio
Times Interest Earned
Inventory Turns
Gross Profit
PE Ratio
Current Assets vs Current Liability
Curr Assets
Curr Liab
Curr Assets/Curr Liab
Curr Assets - Curr Liab
Days Cash
Cash
Expenses
Expenses/3
iv) Profitability Ratios
Profit margin
= Net income
/ Sales
Return on assets (ROA) = Net income
/ Total assets
Return on equity (ROE) = Net income
/ Total equity
ROE
/ Sales)
= (Net Income
x
(Sales
/ Assets)
x (Assets
/ Equity)
v) Market Value Ratios
Price to earnings ratio
= Price per share
/ Earnings per share
Market-to-book ratio
= Market value per share / book value per share
i) Short Term Solvency or Liquidity Ratios
Current ratio
= Current assets
/ Current liabilities
Quick Ratio
= (Current assets
- Inventory)
Cash ratio
= Cash
/ Current liabilities
Net Working Capital
= Net Working Capital
/ Total Assets
Internal measure
=
William Company
Economy
Regular
Super
Driver: Box of popcorn
Capacity
50,000
120,000
300,000
0.43
0.35
0.26
Costs
Variable:
Fixed:
Efficiency Ranges
8,000
24,125
<37500
11,000
20,000
24,125
46,000
46,000
37500-100000 100000+
a. Number of boxes for Econ an
ii) Long Term Solvency or Financial Leverage Ratios
Total debt ratio
= (Total Assets
- Total Equity)
Debt to equity ratio
= Total debt
/ Total equity
Equity Multiplier
= Total assets
/ Total equity
Long term debt ratio
= Long term debt
/ (Long term debt
T
Royal Holland
Driver: Pasenger
Relevant Range: up to 1500
Total Variable Costs
Fixed Costs
Selling Price per Customer
Variable Cost per Customer
Unit CM per Customer
324000
607500
1620
270
1350
Break-even (# of Customers)
450 part a
# of cruises per year
Term
Definition / Explaination
an indicator of whether the company will be able to meet its current
obligations (pay its bills, meets its payroll, make a loan payment, etc.)
a company has current assets exactly equal to current liabilities, it has no
Work