Financial Ratio Equations - CFA Level II

Study this set online at: http://www.cram.com/ashcards/nancial-ratio-equations-cfa-level-ii-4711619

Current Ratio
Current Assets /
Current Liabilities
Quick Ratio
(Cash + S-T Investments +
Receivables) / Current
Liabilities
Cash Ratio
(Cash + S-T Investments)
/ Current Liabilities
Defensive Interval
Ratio
(Cash + S-T Investments +
Receivables) / Daily Cash
Expenditures
Receivables
Turnover
Total Revenue /
Average Receivables
Days of Sales
Outstanding
Number of Days in a period
/ Receivables Turnover
Inventory Turnover
Ratio
COGS / Average
Inventory
Days of Inventory
on Hand
Number of days in a period
/ Inventory turnover ratio
Financial Ratio Equations - CFA Level II
Study this set online at: http://www.cram.com/ashcards/nancial-ratio-equations-cfa-level-ii-4711619
Payables turnover
ratio
Purchases / Average
trade payables
Number of days of
payables
Number of days in a period
/ Payables turnover ratio
Cash Conversion Cycle
(net operating cycle)
DOH + DSO - Number
of days of payables
Working capital
turnover ratio
Total revenue / Average
working capital
Fixed asset
turnover ratio
Total revenue / Average
net xed assets
Total asset
turnover ratio
Total revenue /
Average total assets
Operating return on
assets
Operating Income /
Average total assets
Return on assets
Net Income /
Average total assets
Financial Ratio Equations - CFA Level II
Study this set online at: http://www.cram.com/ashcards/nancial-ratio-equations-cfa-level-ii-4711619
Return on equity
Net Income / Average
shareholders' equity
Return on total
capital
EBIT / (Interest bearing debt
+ Shareholders' Equity)
Return on common
equity
(Net Income - preferred
dividends) / Average common
shareholders' equity
Tax burden
Net Income / Earnings
before taxes
Interest burden
Earnings before taxes /
Earnings before interest and
taxes
Financial leverage ratio
(equity multiplier)
Average total assets /
Average shareholders' equity
Total Debt
Total of interest-bearing S-T and L-T
debt, ex liabilities such as accrued
expenses and accounts payable
Debt to assets ratio
Total debt / Total
assets
Financial Ratio Equations - CFA Level II
Study this set online at: http://www.cram.com/ashcards/nancial-ratio-equations-cfa-level-ii-4711619
Debt to equity ratio
Total debt / Total
shareholders' equity
Debt to Capital
ratio
Total debt / (total debt +
total shareholders' equity)
Interest Coverage
Ratio
Earnings before interest &
taxes / Interest Payments
Fixed Charge
coverage ratio
(EBIT + lease payments) /
(Interest payments + lease
payments)
Dividend payout
ratio
Common share dividends /
Net income attributable to
common shares
Retention Rate
(Net Income attributable to common
shares - Common share dividends) / (Net
Income attributable to common shares) -
or- 1 - payout ratio
Sustainable growth
rate
retention rate x
return on equity
Earnings per share
Net Income - preferred
dividends / weighted avg # of
ordinary shares outstanding
Financial Ratio Equations - CFA Level II
Study this set online at: http://www.cram.com/ashcards/nancial-ratio-equations-cfa-level-ii-4711619
Book Value per
share
Common stockholders' equity
/ total number of common
shares outstanding
Free Cash Flow to
equity (FCFE)
Cash ow from operations -
Investment in xed capital +
Net borrowing
Free cash ow to
the rm (FCFF)
Cash ow from operations + Interest expense x
(1 - tax rate) - Investment in xed capital
* should only add back interest, if it was
subtracted to calculate CFFO