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    Final Exam Cheat-Sheet

    Uploaded by

    Paolo Tipo
    This document defines various financial ratios used to analyze a company's performance and financial health. It includes ratios related to liquidity, asset use, profitability, market value, debt, cash flow, and inventory management. Specifically, it defines the current ratio, receivables turnover ratio, return on assets, total asset turnover, gross profit margin, net profit margin, earnings per share, quantity of income, dividends yield, debt to equity, times interest earned, free cash flow, capital acquisition ratio, inventory turnover, fixed assets turnover, accounts payable turnover, working capital, present value, and quality of income ratio.

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    Final Exam Cheat-Sheet

    Uploaded by

    Paolo Tipo
    151 views1 page
    This document defines various financial ratios used to analyze a company's performance and financial health. It includes ratios related to liquidity, asset use, profitability, market value, debt, cash flow, and inventory management. Specifically, it defines the current ratio, receivables turnover ratio, return on assets, total asset turnover, gross profit margin, net profit margin, earnings per share, quantity of income, dividends yield, debt to equity, times interest earned, free cash flow, capital acquisition ratio, inventory turnover, fixed assets turnover, accounts payable turnover, working capital, present value, and quality of income ratio.

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    Final exam cheat-sheet

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    This document defines various financial ratios used to analyze a company's performance and financial health. It includes ratios related to liquidity, asset use, profitability, market value, debt, cash flow, and inventory management. Specifically, it defines the current ratio, receivables turnover ratio, return on assets, total asset turnover, gross profit margin, net profit margin, earnings per share, quantity of income, dividends yield, debt to equity, times interest earned, free cash flow, capital acquisition ratio, inventory turnover, fixed assets turnover, accounts payable turnover, working capital, present value, and quality of income ratio.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    151 views1 page

    Final Exam Cheat-Sheet

    Uploaded by

    Paolo Tipo
    This document defines various financial ratios used to analyze a company's performance and financial health. It includes ratios related to liquidity, asset use, profitability, market value, debt, cash flow, and inventory management. Specifically, it defines the current ratio, receivables turnover ratio, return on assets, total asset turnover, gross profit margin, net profit margin, earnings per share, quantity of income, dividends yield, debt to equity, times interest earned, free cash flow, capital acquisition ratio, inventory turnover, fixed assets turnover, accounts payable turnover, working capital, present value, and quality of income ratio.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 1

    RATIOS

     Current ratio = Current assets / Current liabilities


     Receivables turnover = Net sales / Average net credit account receivables*1
     Return on assets = Net Income / Total Assets
     Total asset turnover = Net sales (or operating revenues) / Average total assets*2
     Gross profit = Sales (revenues) – Cost of goods sold (sales)
     Gross profit margin (percentage) = [ Net) Sales – Cost of goods sold (sales)] / Net sales
     Net profit margin = Net income / Net sales (or operating revenues)
     Earnings per share (EPS) = Net income / Average number of shares of common stock outstanding during the period

    *1 Average net credit account receivables = (Beginning net credit account receivables + Ending net credit account receivables) /
    2
    *2 An average is computed as: (Beginning balance + Ending balance) / 2

     Quantity of income = cash flow from operating activities / net income


     Dividends yield = dividends per share / market price per share
     Debt to equity = total liabilities / total stockholders’ equity
     Times interest earned = (net income + interest expenses + income tax expense) / interest expense
     Free cash flow = cash flow from operating activities- dividends – capital expenditures
     Capital acquisition ratio = cash flow from operating activities / cash paid for property plans and equipment
     Inventory turnover = cost of goods sold (CGS) / Average inventory
     Average days to sell inventory = 365 / inventory turnover
     Fixed assets turnover = Net sales / net average fixed assets
     Changes in depreciation estimates (Revised depreciation expense) = (net book value – new residual value) / remaining
    life
     Accounts payable turnover = cost of sales (goods sold) / Average account payable
     Average days to pay payables = 365 / accounts payable turnover
     Notes payable: Interest = (principal x annual interest rate x n. of months) / 12 (months)
     Working capital = current assets – current liabilities
     Capital acquisitions ratio = cash flow from operating activities / cash paid for property, plant and equipment
     Receivables turnover ratio = net sales / average net trade accounts receivable
     Present value of a single amount = amount / (1 + interest rate)n where n = years
     Free cash flow = cash flow from operating activities – dividends – capital expenditures
     Times interest earned = (Net income + Interest expense + income tax expense) / interest expense
     Debt to equity = Total liabilities / Total Stockholders’ equity
     Dividend yield = Dividends per share / market price per share
     Quality of income ratio = cash flow from operating activities / net income

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