Ratio

Formula

1.

Net working capital

current assets current liabilities

2.

Current ratio

3.

Quick Ratio (Acid-test ratio)

4.

Inventory turnover

5.

Average age of inventory

6.

Accounts receivable turnover

annual credit sales

average accounts receivable

7.

Average age of accounts receivable

365
accounts receivable turnover

8.

Accounts payable turnover

9.

Purchases

10.

Average age of accounts payable

11.

Operating Cycle

12.

Cash Conversion Cycle

13.

Debt ratio

14.

Long term debt-equity ratio

15.

Debt-to-total capitalization

current assets
current liabilitie s

current assets inventory

current liabilitie s
cost of goods sold
average inventory
365
inventory turnover

annual credit purchases

average accounts payable

COGS + INVt INVt-1

365
accounts payable turnover

inventory age + accts. receivable age

inventory age + accts. receivable age - accts. payble age

total liabilitie s
total assets
long - term debt
stockholde rs' equity

long - term debt

total capitaliza tion

-1-

Ratio

Formula

total debt

16.

Total debt-equity ratio

17.

Times interest earned

18.

Total debt coverage

19.

Overall coverage ratio

20.

D, D, D, & A

21.

Gross profit margin

22.

Operating profit margin

23.

Net profit margin

24.

Total asset turnover

25.

Return on Assets (return on investment)

26.

Return on equity

27.

Return on common stock equity

28.

Financial Leverage Multiplier

28.

Earnings per share

stockholde rs' equity

earnings before interest and taxes

interest
earnings before interest and taxes
interest
EBIT

principal [1/(1

lease payments

int. lease pay. [prin.

SF pmts.

t )]

D, D & A
pref. div] [1/(1

t )]

Depreciation, Depletion, Deferred Taxes & Amortization

gross profit
sales
operating profit (EBIT)
sales
net profit after taxes
sales

sales
total assets
net profit after taxes
total assets
net profit after taxe s
stockholde rs' equity
earnings available for common
common stock equity

total assets
common. stkhlder' s equity
earnings available for common
number of shares outstandin g

-2-

Ratio

Formula

29.

Dividends per share

common stock dividends

number of shares outstandin g

30.

Book value per share

book value of common stock

number of shares outstandin g

31.

Price Earnings Ratio

32.

DuPont Formula (ROA)

33.

DuPont Formula (ROE)

34.

DuPont Formula (ROCE)

35.

Operating Breakeven Pt.

price
earnings per share

sales
total assets

sales

total assets

sales
total assets

Financial Breakeven Pt.

37.

Degree of Operating Leverage

net profit after taxes

sales

net profit after taxes

sales

preferred dividend
1 - tx rate

price - variable cost/unit

sales
EPS

39.

total assets
stockholde r' s equity

fixed cost
price - variable cost/unit

EBIT

38.

total assets
NPAT - pfd divs.
X
common. stkhlder' s equity
sales

interest exp.

36.

Degree of Financial Leverage

EBIT

Degree of Total Leverage

EBIT
sales
EPS
EBIT

DOL X DFL

-3-