ROA & ROE
Netincome/ avg total asset
how efficiently a company uses its assets to generate net income.
Net income/ avg total equity
Measures the return generated on shareholders’ equity, showing profitability from owners’ perspective.
Inventory turnover
COGs/ avg inventory
Inventory turnover measures how many times a company sells and replaces its inventory during a period.
Debt to equity ratio
Total liabilities/ total equity
It measures the proportion of a company’s financing that comes from creditors (debt) versus owners (equity)
Eps
Income available to common stock holder (net of preferred dividends)/ WA common shares outstanding
must be presented on the face of the income statement for income from continuing operations and net income.
AR turn over
Sales (net)/ Avg AR (net)
measures how efficiently a company collects its receivables.
EBITDA top down & bottom up
Top down;
Sales- cogs -( operating expenses - depreciation and amortization )
Bottom up;
Netincome + interest+ tax+ dep +amortization
It measures a company’s operating performance by excluding non-cash expenses and financing/tax effects.
Quick ratio
(Cash + cash equivalents+ short term marketable securities + receivables ( net))/ current liabilities
Inventory are not quick assets
measures a company’s short-term liquidity by comparing its most liquid assets to its current liabilities.
Equity multiplier
Total asset/ total equity
measures the proportion of a company’s assets financed by shareholders’ equity.
Asset turn over
Sales (net)/avg total assets
Asset turnover measures how efficiently a company uses its assets to generate sales.
Operating cash flow ratio
Cash flow from op/current liabilities
measures a company’s ability to cover its current liabilities with cash generated from operations.
Dividend payout ratio
Cash dividend/ netincome
measures the portion of net income paid out as dividends to shareholders.
Price per earnings
Market price per share/ eps
how much investors are willing to pay per dollar of earnings, reflecting the company’s growth expectations.
Days sales in AR
Ending AR (net)/ sales net
*365
measures the average number of days it takes to collect receivables.
Book value per common share
Common stock holders equity/ common shares outstanding
Where common stockholders equity is
Total shareholders equity
Minus preferred stock outstanding call price or par which ever is higher
Plus cumulative preferred dividends in arrears
This measures the amount each common shareholder would theoretically receive if the company liquidated its assets at book value and paid off all liabilities and preferred shareholders first
Formula to calculate credit loss expense (bad debt expense)
Beg allowance + credit loss expense - write offs + recoveries = end allowance
Escrow liability
Beg + receipts(deposits) -payments + interest earned - maintenance fee
Net profit margin
Net income / revenue
measures how much net income a company generates as a percentage of its sales.
Free cash flow to equity
Cash Flow from Operations - Capital Expenditures - Debt Payments + New debt Issued
Gross profit margin
(Gross profit / revenue )*100
(Sales - cogs / sales)
ows the percentage of sales revenue remaining after deducting the cost of goods sold (COGS). It measures how efficiently a company produces and sells its products.
AP turn over
COGS/ avg accounts payable
measures how many times a company pays off its accounts payable during a period.
Total debt ratio
Total liabilities / total assets
measures the proportion of a company’s assets financed by liabilities.
Cash conversion cycle
Day sales in AR + days in inventory - days of payables outstanding
measures the time between cash outflow to buy or make inventory and cash inflow from collecting receivables.
Days of payables outstanding
End AP/ cogs/365
measures the average number of days a company takes to pay its suppliers.
Days in inventory
End inventory/ cogs * 365
Or end/(cogs/365)
