Scribd
Upload
35 views

Current Ratio: Profitability Analysis Ratios

The document defines and provides the formulas for several financial ratios used to analyze companies. These include liquidity ratios like the current ratio and quick ratio, profitability ratios like return on assets and earnings per share, activity ratios like asset turnover and inventory turnover, capital structure ratios like debt to equity, and market ratios like price to earnings and dividend yield. Formulas are provided to calculate each ratio based on values from a company's financial statements.

Uploaded by

arjunjan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
35 views

Current Ratio: Profitability Analysis Ratios

The document defines and provides the formulas for several financial ratios used to analyze companies. These include liquidity ratios like the current ratio and quick ratio, profitability ratios like return on assets and earnings per share, activity ratios like asset turnover and inventory turnover, capital structure ratios like debt to equity, and market ratios like price to earnings and dividend yield. Formulas are provided to calculate each ratio based on values from a company's financial statements.

Uploaded by

arjunjan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

Current Ratio Current Ratio = Current Assets -----------------------Current Liabilities

Quick Ratio Quick Ratio = Quick Assets ---------------------Current Liabilities

Quick Assets = Current Assets - Inventories Net Working Capital Ratio Net Working Capital Ratio = Net Working Capital = Current Assets - Current Liabilities Net Working Capital -------------------------Total Assets

Profitability Analysis Ratios Return on Assets (ROA) Return on Assets (ROA) = Net Income ---------------------------------Average Total Assets

Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2 Return on Equity (ROE) Return on Equity (ROE) = Net Income -------------------------------------------Average Stockholders' Equity

Average Stockholders' Equity = (Beginning Stockholders' Equity + Ending Stockholders' Equity) / 2 Return on Common Equity (ROCE) Return on Common Equity =

Net Income ----------------------------------Average Common Stockholders

Average Common Stockholders' Equity = (Beginning Common Stockholders' Equity + Ending Common Stockholders' Equity) / 2 Profit Margin Profit Margin = Net Income ----------------Sales

Earnings Per Share (EPS)

Earnings Per Share =

Net Income --------------------------------------------Number of Common Shares Outstanding

Activity Analysis Ratios Assets Turnover Ratio Assets Turnover Ratio = Sales ---------------------------Average Total Assets

Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2 Accounts Receivable Turnover Ratio Accounts Receivable Turnover Ratio = Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2 Inventory Turnover Ratio Inventory Turnover Ratio = Cost of Goods Sold --------------------------Average Inventories

Sales ---------------------Average Accounts R

Average Inventories = (Beginning Inventories + Ending Inventories) / 2

Capital Structure Analysis Ratios Debt to Equity Ratio Debt to Equity Ratio = Total Liabilities ---------------------------------Total Stockholders' Equity

Interest Coverage Ratio Interest Coverage Ratio = Income Before Interest and Income Tax Expenses = Income Before Income Taxes + Interest Expense Capital Market Analysis Ratios Price Earnings (PE) Ratio Price Earnings Ratio =

Income Before Interest and Income Tax Ex -----------------------------------------------Interest Expense

Market Price of Common Stock Per Share ----------------------------------------------------

Earnings Per Share

Market to Book Ratio Market to Book Ratio =

Market Price of Common Stock Per Share ---------------------------------------------------Book Value of Equity Per Common Share

Book Value of Equity Per Common Share = Book Value of Equity for Common Stock / Number of Common Shares Dividend Yield Dividend Yield = Annual Dividends Per Common Share -----------------------------------------------Market Price of Common Stock Per Share

Book Value of Equity Per Common Share = Book Value of Equity for Common Stock / Number of Common Shares Dividend Payout Ratio Dividend Payout Ratio = Cash Dividends -------------------Net Income

ROA = Profit Margin X Assets Turnover Ratio ROA = Profit Margin X Assets Turnover Ratio Net Income ROA = ------------------------ = Average Total Assets Profit Margin = Net Income / Sales Assets Turnover Ratio = Sales / Averages Total Assets

Net Income -------------- X Sales

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy