DLSU BASFIN1 Financial equations formula sheet

1. A. Liquidity Ratio
Current Ratio = Current Assets
Current Liabilities
Acid Test Ratio = Current Assets - Inventories
Current Liabilities
Average Collection Period=
Accounts Receivables
Annual Credit Sales/365 days
Accounts Receivable Turnover Ratio= Annual Credit Sales
Accounts Receivable
Inventory Turnover Ratio=
Cost of Goods Sold
Inventories
B. Capital Structure Ratio
Debt Ratio = Total Debt
Total Assets
Times Interest Earned = Net Operating Income/EBIT
Interest Expense
C. Assets Management Efficiency Ratios
Total Asset Turnover =
Sales
.
Total Assets
Fixed Asset Turnover=
Sales
.
Net Plant and Equipment
D. Profitability Ratio
Gross Profit Margin = Gross Profit
Sales
Operating Profit Margin = Net Operating Income / EBIT
Sales
Net Profit Margin = Net Income
Sales
Operating Return on Assets= Net Operating Income / EBIT
Total Assets
Return on Equity=
Net Income .
Common Equity
E. Market Value Ratio
Price / Earnings Ratio = Market Price per Share
Earning Price per Share
Market-to-Book Ratio = Market Price per Share
Book Value per Share