Interest-bearing debt
extent to which the assets having explicit cost(total
5. Interest- bearing Debt Ratio
6. Debt to Tangible Net Worth
Ratio
7. Times Interest- Earned Ratio or
Interest Coverage Ratio
8.Debt-Equity Ratio
9. Fixed charge coverage ratio or
EARNINGS TO FIXED
CHANGES RATIO
10. Operating cash flow to total
debt ratio
ASSET MANAGEMENT RATIOS- how the firm uses its assets to generate revenue and income
1. Finished Goods or
Merchandise Inventory Turnover
Number of Days in a Yr (360)
2. Average Age Of Inventories or
Number of days of inventory
Average daily COGS
Cost of Raw Materials Used
Raw Materials Turnover
Goods in Process Turnover Ave. Goods in Process Inventory
3. Receivables Turnover ratio
4. Average Age of AR or average
collection period
5. Operating Cycle or Conversion
Period
6. Average Age of Accounts
Payable
Payables Turnover
Average Age of TP
7. Fixed Assets Turnover Ratio
8. Total Assets Turnover Ratio
Total Capital Turnover Ratio
10. Investment Rate
Equity + Interest Bearing debt
capital) are financed by interest-bearing debt
Total Liabilities more conservative measure of long-term debt payment
Equity- intangible assets ability than the debt ratio or debt-equity ratio
margin of safety for payment of fixed interest charges
EBIT - extent to which operations cover interest expense
Interest Expense
- the higher the TIE is = solvent ; company can afford
to pay all of its expenses and still has a large income
Total Liabilities compare resources provided by creditors with
Equity resources provided by shareholders
EBIT + Interest portion of
operating leases
Margin of safety of payment of all fixed charges
Interest + Interest portion of
operating leases
Operating cash flow portion of total liabilities that can be paid out of the
Total debt cash flows from operations
indicates if a firm holds excessive stock of inventories
that are unproductive and that lessen the companys
COGS profitability
Average Inventory
AVERAGE INVENTORY= (Beg. + End) / 2
Inventory Turnover
Average # of days that inventory is held before sale
- higher turnover and short average age of inventories
Average Inventory
is desirable
Ave. RM Inventory
COGM
Net Credit Sales
average # of days to collect a receivable
Average Account Receivables
Number of Days in a Yr (360)
Receivables Turnover
average # of days to collect a receivable
Average AR
Average daily Sales
Average Age of Inventories +
average # of days to convert inventories to cash
Average Age of Receivables
Average Accounts Payable Determine whether the firm is paying its invoices on a
Average Daily Purchases timely basis
Net Credit Purchases
length of time which trade payables remain unpaid
Average Trade Payables
Number of Days in a Yr (360)
Payables Turnover
Net Sales
level of use of PPE
Average Net Fixed Assets
Net Sales
level of investment relative to sales volume
Average Total Assers
Net sales
Total Capital
level of total assets having explicit costs relative to
Total Capital = total assets having sales volutme
explicit costs (Equity + interest-
bearing debt)
Total Capital, 200B - Total
Capital, 200A % Change in total capital
Total Capital, 200A