Ratio

LIQUIDITY RATIOS Current ratio

how calculated
current assets

what is measure
the extent to which a Firm can meet its Short-term obligations

Quick Ratio

current assets minus inventory Liabilities

Leverage Ratios
Debt to-assets Ratio Total assets Long-term debt-to-equity Total debt the percentage of total funds that are provided by creditors the balance between debt The percentage of Total Fund provided by creditors Versus by owner the balance between debt and equity in a firms long term capital structure The extend to which earnings can decline Without the firm becoming Unable to meet its annual Interest cost

Long-term debt Total stockholders equity

Long term debt to equity Ratio

long term debt Total stockholders equity

Times interest earned Ratio

Profit before interested and taxes Total interest charges

ACTIVITY RATIOS Inventory turnover Sales Inventory of finished goods Whether o firm holds excessive stocks of Inventories and whether A firm is selling its Inventories slowly compared To the industry average Sales productivity and plant and equipment utilization

Fixed assets Turnover

Sales Fixed assets

Total assets Turnover

Sales Total assets

whether a firm is generating a sufficient volume of Business fro the size of its Asset investment The average length of time it takes a firm to collect credit Sales (in percentage terms) The average length of time it takes a firm to collect credit Sales (in days)

Account receivable Turnover Average collection Period PROFITABILITY RATIOS Gross profit margin

Annual credit sales Account receivable Account receivable Total credit sales/ 365 days

Sales minus cost of goods sold Sales Earning before interest and taxes (EBIT) Sales Net Income Sales Net Income Total assets

The total margin available to cover operating expenses and Yield a profit Profitability without concern for taxes and interest After-tax profit per dollar of sales After-tax profit per dollar of assets; this ratio is also called return on investment (ROA) After-tax profit per dollar of of stockholders investment In the firm Earning available to the owner of common stock

Operating profit margin Net profit Margin Return to Total Assets (ROA)

Return on Stockholders Equity (ROE) Earning per share (EPS)

Net income Total stockholders equity Net income Name of share of common stock outstanding

GROWTH RATIOS Sales Annual percentage growth in total Sales Firms growth rate in Sales

Income Earning Per Share Divided Per Share Price Earning Ratio

Annual percentage growth in profit Annual percentage growth in EPS Annual percentage growth in divided per share Market Price par share Earning Per Share

Firms growth rate in profit Firms growth in EPS Firms growth rate in divided per share Faster growing and less risky firm tend to have higher price Earnings ratios