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Financial Ratios and Formulas for Analysis

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Financial Ratio & Formulas Activity Ratios: ๐‘…๐‘’๐‘๐‘’๐‘–๐‘ฃ๐‘Ž๐‘๐‘™๐‘’๐‘  ๐‘‡๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ = ๐ด๐‘›๐‘›๐‘ข๐‘Ž๐‘™ ๐‘†๐‘Ž๐‘™๐‘’๐‘  ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘…๐‘’๐‘๐‘’๐‘–๐‘ฃ๐‘Ž๐‘๐‘™๐‘’๐‘  ๐ท๐‘Ž๐‘ฆ๐‘  ๐‘œ๐‘“ ๐‘ ๐‘Ž๐‘™๐‘’๐‘  ๐‘œ๐‘ข๐‘ก๐‘ ๐‘ก๐‘Ž๐‘›๐‘‘๐‘–๐‘›๐‘” = 365 ๐‘…๐‘’๐‘๐‘’๐‘–๐‘ฃ๐‘Ž๐‘๐‘™๐‘’๐‘  ๐‘‡๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ ๐ผ๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ ๐‘‡๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ = ๐ถ๐‘œ๐‘ ๐‘ก ๐‘œ๐‘“ ๐‘”๐‘œ๐‘œ๐‘‘๐‘  ๐‘ ๐‘œ๐‘™๐‘‘ ๐‘Ž๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘–๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ ๐ท๐‘Ž๐‘ฆ๐‘  ๐‘œ๐‘“ ๐‘–๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ ๐‘œ๐‘› โ„Ž๐‘Ž๐‘›๐‘‘ = 365 ๐‘–๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ ๐‘ก๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ ๐‘ƒ๐‘Ž๐‘ฆ๐‘Ž๐‘๐‘™๐‘’๐‘  ๐‘‡๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ = ๐‘ƒ๐‘ข๐‘Ÿ๐‘โ„Ž๐‘Ž๐‘ ๐‘’๐‘  ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘ก๐‘Ÿ๐‘Ž๐‘‘๐‘’๐‘  ๐‘๐‘Ž๐‘ฆ๐‘Ž๐‘๐‘™๐‘’ ๐‘๐‘œ. ๐‘œ๐‘“ ๐‘‘๐‘Ž๐‘ฆ๐‘  ๐‘œ๐‘“ ๐‘๐‘Ž๐‘ฆ๐‘Ž๐‘๐‘™๐‘’๐‘  = 356 ๐‘๐‘Ž๐‘ฆ๐‘Ž๐‘๐‘™๐‘’๐‘  ๐‘ก๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ ๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘œ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐‘Ž๐‘ ๐‘ ๐‘’๐‘ก ๐‘ก๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ = ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘ก๐‘œ๐‘ก๐‘Ž๐‘™ ๐‘Ž๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐น๐‘–๐‘ฅ๐‘’๐‘‘ ๐‘Ž๐‘ ๐‘ ๐‘’๐‘ก ๐‘‡๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ = ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘›๐‘’๐‘ก ๐‘“๐‘–๐‘ฅ๐‘’๐‘‘ ๐‘Ž๐‘ ๐‘ ๐‘’๐‘ก ๐‘Š๐‘œ๐‘Ÿ๐‘˜๐‘–๐‘›๐‘” ๐‘๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ ๐‘‡๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ = ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘ค๐‘œ๐‘Ÿ๐‘˜๐‘–๐‘›๐‘” ๐‘๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ Liquidity Ratio: ๐ถ๐‘ข๐‘Ÿ๐‘Ÿ๐‘’๐‘›๐‘ก ๐‘…๐‘Ž๐‘ก๐‘–๐‘œ = ๐ถ๐‘ข๐‘Ÿ๐‘Ÿ๐‘’๐‘›๐‘ก ๐ด๐‘ ๐‘ ๐‘’๐‘ก ๐ถ๐‘ข๐‘Ÿ๐‘Ÿ๐‘’๐‘›๐‘ก ๐ฟ๐‘–๐‘Ž๐‘๐‘–๐‘™๐‘–๐‘ก๐‘–๐‘’๐‘  ๐‘„๐‘ข๐‘–๐‘๐‘˜ ๐‘…๐‘Ž๐‘ก๐‘–๐‘œ = ๐ถ๐‘Ž๐‘ โ„Ž + ๐‘€๐‘Ž๐‘Ÿ๐‘˜๐‘’๐‘ก๐‘Ž๐‘๐‘™๐‘’ ๐‘ ๐‘’๐‘๐‘ข๐‘Ÿ๐‘–๐‘ก๐‘–๐‘’๐‘  + ๐‘…๐‘’๐‘๐‘’๐‘–๐‘ฃ๐‘Ž๐‘๐‘™๐‘’๐‘  ๐ถ๐‘ข๐‘Ÿ๐‘Ÿ๐‘’๐‘›๐‘ก ๐ฟ๐‘–๐‘Ž๐‘๐‘–๐‘™๐‘–๐‘ก๐‘–๐‘’๐‘  ๐ถ๐‘Ž๐‘ โ„Ž ๐‘…๐‘Ž๐‘ก๐‘–๐‘œ = ๐ถ๐‘Ž๐‘ โ„Ž + ๐‘€๐‘Ž๐‘Ÿ๐‘˜๐‘’๐‘ก๐‘Ž๐‘๐‘™๐‘’ ๐‘†๐‘’๐‘๐‘ข๐‘Ÿ๐‘–๐‘ก๐‘–๐‘’๐‘  ๐ถ๐‘ข๐‘Ÿ๐‘Ÿ๐‘’๐‘›๐‘ก ๐ฟ๐‘–๐‘Ž๐‘๐‘–๐‘™๐‘–๐‘ก๐‘–๐‘’๐‘ 
๐ท๐‘’๐‘“๐‘’๐‘›๐‘ ๐‘–๐‘ฃ๐‘’ ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘›๐‘Ž๐‘™ = ๐ถ๐‘Ž๐‘ โ„Ž + ๐‘€๐‘Ž๐‘Ÿ๐‘˜๐‘’๐‘ก๐‘Ž๐‘๐‘™๐‘’ ๐‘ ๐‘’๐‘๐‘ข๐‘Ÿ๐‘–๐‘ก๐‘–๐‘’๐‘  + ๐‘…๐‘’๐‘๐‘’๐‘–๐‘ฃ๐‘Ž๐‘๐‘™๐‘’๐‘  ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‘๐‘Ž๐‘–๐‘™๐‘ฆ ๐‘’๐‘ฅ๐‘๐‘’๐‘›๐‘‘๐‘–๐‘ก๐‘ข๐‘Ÿ๐‘’ ๐ถ๐‘Ž๐‘ โ„Ž ๐ถ๐‘œ๐‘›๐‘ฃ๐‘’๐‘Ÿ๐‘ ๐‘–๐‘œ๐‘› ๐ถ๐‘ฆ๐‘๐‘™๐‘’ = ( ๐ท๐‘Ž๐‘–๐‘™๐‘ฆ ๐‘†๐‘Ž๐‘™๐‘’๐‘  ๐‘‚๐‘ข๐‘ก๐‘ ๐‘ก๐‘Ž๐‘›๐‘‘๐‘–๐‘›๐‘” ) + ( ๐ท๐‘Ž๐‘ฆ๐‘  ๐‘œ๐‘“ ๐‘–๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ ๐‘œ๐‘› โ„Ž๐‘Ž๐‘›๐‘‘ ) โˆ’ ( ๐‘๐‘ข๐‘š๐‘๐‘’๐‘Ÿ ๐‘œ๐‘“ ๐‘‘๐‘Ž๐‘ฆ๐‘  ๐‘œ๐‘“ ๐‘๐‘Ž๐‘ฆ๐‘Ž๐‘๐‘™๐‘’ ) Solvency Ratios: ๐ท๐‘’๐‘๐‘ก โˆ’ ๐‘ก๐‘œ โˆ’ ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ = ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘ก ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’โ„Ž๐‘œ๐‘™๐‘‘๐‘’๐‘Ÿโ€ฒ ๐‘  ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ ๐ท๐‘’๐‘๐‘ก โˆ’ ๐‘ก๐‘œ โˆ’ ๐ถ๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ = ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘ก ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘ก + ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’โ„Ž๐‘œ๐‘™๐‘‘๐‘’๐‘Ÿโ€ฒ ๐‘  ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ ๐ท๐‘’๐‘๐‘ก โˆ’ ๐‘ก๐‘œ โˆ’ ๐ด๐‘ ๐‘ ๐‘’๐‘ก = ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘ก ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐น๐‘–๐‘›๐‘Ž๐‘›๐‘๐‘–๐‘Ž๐‘™ ๐ฟ๐‘’๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ = ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐ถ๐‘œ๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ = ๐ธ๐‘Ž๐‘Ÿ๐‘›๐‘–๐‘›๐‘”๐‘  ๐‘๐‘’๐‘“๐‘œ๐‘Ÿ๐‘’ ๐‘–๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ก๐‘  ๐‘Ž๐‘›๐‘‘ ๐‘ก๐‘Ž๐‘ฅ๐‘’๐‘  ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘ƒ๐‘Ž๐‘ฆ๐‘š๐‘’๐‘›๐‘ก๐‘  ๐น๐‘–๐‘ฅ๐‘’๐‘‘ ๐ถโ„Ž๐‘Ž๐‘Ÿ๐‘”๐‘’ ๐ถ๐‘œ๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ = ๐ธ๐‘Ž๐‘Ÿ๐‘›๐‘–๐‘›๐‘”๐‘  ๐‘๐‘’๐‘“๐‘œ๐‘Ÿ๐‘’ ๐‘–๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘Ž๐‘›๐‘‘ ๐‘ก๐‘Ž๐‘ฅ๐‘’๐‘  + ๐ฟ๐‘’๐‘Ž๐‘ ๐‘’ ๐‘ƒ๐‘Ž๐‘ฆ๐‘š๐‘’๐‘›๐‘ก๐‘  ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘ƒ๐‘Ž๐‘ฆ๐‘š๐‘’๐‘›๐‘ก๐‘  + ๐ฟ๐‘’๐‘Ž๐‘ ๐‘’ ๐‘ƒ๐‘Ž๐‘ฆ๐‘š๐‘’๐‘›๐‘ก๐‘  Profitability Ratios ๐‘๐‘’๐‘ก ๐‘ƒ๐‘Ÿ๐‘œ๐‘“๐‘–๐‘ก ๐‘€๐‘Ž๐‘Ÿ๐‘”๐‘–๐‘› = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐บ๐‘Ÿ๐‘œ๐‘ ๐‘  ๐‘ƒ๐‘Ÿ๐‘œ๐‘“๐‘–๐‘ก ๐‘€๐‘Ž๐‘Ÿ๐‘”๐‘–๐‘› = ๐บ๐‘Ÿ๐‘œ๐‘ ๐‘  ๐‘ƒ๐‘Ÿ๐‘œ๐‘“๐‘–๐‘ก ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐‘ƒ๐‘Ÿ๐‘œ๐‘“๐‘–๐‘ก ๐‘€๐‘Ž๐‘Ÿ๐‘”๐‘–๐‘› = ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐‘‚๐‘… ๐ธ๐ต๐ผ๐‘‡ ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐‘ƒ๐‘Ÿ๐‘’๐‘ก๐‘Ž๐‘ฅ ๐‘€๐‘Ž๐‘Ÿ๐‘”๐‘–๐‘› = ๐ธ๐ต๐‘‡ ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’
๐‘…๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› ๐‘œ๐‘› ๐ด๐‘ ๐‘ ๐‘’๐‘ก (๐‘…๐‘‚๐ด) = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐‘…๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› ๐‘œ๐‘› ๐ด๐‘ ๐‘ ๐‘’๐‘ก (๐‘…๐‘‚๐ด) = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ + ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘’๐‘ฅ๐‘๐‘’๐‘›๐‘ ๐‘’(1 โˆ’ ๐‘ก๐‘Ž๐‘ฅ ๐‘Ÿ๐‘Ž๐‘ก๐‘’) ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐‘…๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› ๐‘œ๐‘› ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  = ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐‘‚๐‘… ๐ธ๐ต๐ผ๐‘‡ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘ก๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐‘…๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› ๐‘œ๐‘› ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ถ๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ = ๐ธ๐ต๐ผ๐‘‡ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ถ๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ ๐‘…๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› ๐‘œ๐‘› ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ ๐‘…๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› ๐‘œ๐‘› ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ โˆ’ ๐‘ƒ๐‘Ÿ๐‘’๐‘“๐‘’๐‘Ÿ๐‘Ÿ๐‘’๐‘‘ ๐ท๐‘’๐‘ฃ๐‘–๐‘‘๐‘’๐‘›๐‘‘ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐ถ๐‘œ๐‘š๐‘š๐‘œ๐‘› ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘Ž๐‘ฃ๐‘Ž๐‘–๐‘™๐‘Ž๐‘๐‘™๐‘’ ๐‘ก๐‘œ ๐ถ๐‘œ๐‘š๐‘š๐‘œ๐‘› ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐ถ๐‘œ๐‘š๐‘š๐‘œ๐‘› ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ Free Cash Flow to Firm: ๐น๐ถ๐น๐น = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ + ๐‘๐‘œ๐‘›๐‘๐‘Ž๐‘ โ„Ž ๐‘โ„Ž๐‘Ž๐‘Ÿ๐‘”๐‘’ + [๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘’๐‘ฅ๐‘๐‘’๐‘›๐‘ ๐‘’ ร— (1 โˆ’ ๐‘‡๐‘Ž๐‘ฅ ๐‘Ÿ๐‘Ž๐‘ก๐‘’)] โˆ’ ๐น๐‘–๐‘ฅ๐‘’๐‘‘ ๐ถ๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก โˆ’ ๐‘Š๐‘œ๐‘Ÿ๐‘˜๐‘–๐‘›๐‘” ๐ถ๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก ๐น๐ถ๐น๐น = ๐ถ๐‘Ž๐‘ โ„Ž ๐น๐‘™๐‘œ๐‘ค ๐‘“๐‘Ÿ๐‘œ๐‘š ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘œ๐‘›๐‘  + [๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘’๐‘ฅ๐‘๐‘’๐‘›๐‘ ๐‘’ ร— (1 โˆ’ ๐‘‡๐‘Ž๐‘ฅ ๐‘Ÿ๐‘Ž๐‘ก๐‘’)] โˆ’ ๐น๐‘–๐‘ฅ๐‘’๐‘‘ ๐ถ๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก Free Cash Flow from Equity: ๐น๐ถ๐น๐ธ = ๐ถ๐‘Ž๐‘ โ„Ž ๐น๐‘™๐‘œ๐‘ค ๐‘“๐‘Ÿ๐‘œ๐‘š ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘œ๐‘›๐‘  โˆ’ ๐น๐‘–๐‘ฅ๐‘’๐‘‘ ๐ถ๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก + ๐‘๐‘’๐‘ก ๐ต๐‘œ๐‘Ÿ๐‘Ÿ๐‘œ๐‘ค๐‘–๐‘›๐‘” ๐ถ๐‘œ๐‘š๐‘š๐‘œ๐‘› โˆ’ ๐‘†๐‘–๐‘ง๐‘’ ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘†๐‘ก๐‘Ž๐‘ก๐‘’๐‘š๐‘’๐‘›๐‘ก ๐‘…๐‘Ž๐‘ก๐‘–๐‘œ๐‘  = ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘†๐‘ก๐‘Ž๐‘ก๐‘’๐‘š๐‘’๐‘›๐‘ก ๐ด๐‘๐‘๐‘œ๐‘ข๐‘›๐‘ก ๐‘†๐‘Ž๐‘™๐‘’๐‘  ๐ถ๐‘œ๐‘š๐‘š๐‘œ๐‘› โˆ’ ๐‘†๐‘–๐‘ง๐‘’ ๐ต๐‘Ž๐‘™๐‘Ž๐‘›๐‘๐‘’ ๐‘†โ„Ž๐‘’๐‘’๐‘ก ๐‘…๐‘Ž๐‘ก๐‘–๐‘œ๐‘  = ๐ต๐‘Ž๐‘™๐‘Ž๐‘›๐‘๐‘’ ๐‘†โ„Ž๐‘’๐‘’๐‘ก ๐ด๐‘๐‘๐‘œ๐‘ข๐‘›๐‘ก ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐Ž๐ซ๐ข๐ ๐ข๐ง๐š๐ฅ ๐ƒ๐ฎ๐๐จ๐ง๐ญ ๐„๐ช๐ฎ๐š๐ญ๐ข๐จ๐ง: ๐‘…๐‘‚๐ธ = ( ๐‘๐‘’๐‘ก ๐‘ƒ๐‘Ÿ๐‘œ๐‘“๐‘–๐‘ก ๐‘€๐‘Ž๐‘Ÿ๐‘”๐‘–๐‘› ) ( ๐ด๐‘ ๐‘ ๐‘’๐‘ก ๐‘‡๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ ) ( ๐ฟ๐‘’๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘…๐‘Ž๐‘ก๐‘–๐‘œ ) ๐„๐ฑ๐ญ๐ž๐ง๐๐ž๐ ๐ƒ๐ฎ๐๐จ๐ง๐ญ ๐„๐ช๐ฎ๐š๐ญ๐ข๐จ๐ง: ๐‘…๐‘‚๐ธ = ( ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐ธ๐ต๐‘‡ ) ( ๐ธ๐ต๐‘‡ ๐ธ๐ต๐ผ๐‘‡ ) ( ๐ธ๐ต๐ผ๐‘‡ ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ) ( ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ) ( ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ )
๐ต๐‘Ž๐‘ ๐‘–๐‘ ๐ธ๐‘ƒ๐น = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ โˆ’ ๐‘ƒ๐‘Ÿ๐‘’๐‘“๐‘’๐‘Ÿ๐‘Ÿ๐‘’๐‘‘ ๐ท๐‘–๐‘ฃ๐‘–๐‘‘๐‘’๐‘›๐‘‘๐‘  ๐‘Š๐‘’๐‘–๐‘”โ„Ž๐‘ก๐‘’๐‘‘ ๐‘Ž๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘›๐‘œ. ๐‘œ๐‘“ ๐‘๐‘œ๐‘š๐‘š๐‘œ๐‘› ๐‘ โ„Ž๐‘Ž๐‘Ÿ๐‘’๐‘  ๐‘œ๐‘ข๐‘ก๐‘ ๐‘ก๐‘Ž๐‘›๐‘‘๐‘–๐‘›๐‘” ๐ท๐‘–๐‘™๐‘ข๐‘ก๐‘’๐‘‘ ๐ธ๐‘ƒ๐‘† = ( ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ โˆ’ ๐‘ƒ๐‘Ÿ๐‘’๐‘“๐‘“๐‘’๐‘Ÿ๐‘’๐‘‘ ๐ท๐‘–๐‘ฃ๐‘–๐‘‘๐‘’๐‘›๐‘‘ ) + ( ๐ถ๐‘œ๐‘›๐‘ฃ๐‘’๐‘Ÿ๐‘ก๐‘–๐‘๐‘™๐‘’ ๐‘ƒ๐‘Ÿ๐‘’๐‘“๐‘’๐‘Ÿ๐‘Ÿ๐‘’๐‘‘ ๐‘‘๐‘–๐‘ฃ๐‘–๐‘‘๐‘’๐‘›๐‘‘ ) + ( ๐ถ๐‘œ๐‘›๐‘ฃ๐‘’๐‘Ÿ๐‘ก๐‘–๐‘๐‘™๐‘’ ๐ท๐‘’๐‘๐‘ก ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ) (1 โˆ’ ๐‘ก) ( ๐‘Š๐‘’๐‘–๐‘”โ„Ž๐‘ก๐‘’๐‘‘ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’๐‘  ) + ( ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’๐‘  ๐‘“๐‘Ÿ๐‘œ๐‘š ๐ถ๐‘œ๐‘›๐‘ฃ๐‘’๐‘Ÿ๐‘ ๐‘–๐‘œ๐‘› ๐‘œ๐‘“ ๐ถ๐‘œ๐‘›๐‘ฃ. ๐‘๐‘“๐‘‘. ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’๐‘  ) + ( ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’๐‘  ๐‘“๐‘Ÿ๐‘œ๐‘š ๐ถ๐‘œ๐‘›๐‘ฃ๐‘’๐‘Ÿ๐‘ ๐‘–๐‘œ๐‘› ๐‘œ๐‘“ ๐ถ๐‘œ๐‘›๐‘ฃ. ๐ท๐‘’๐‘๐‘ก ) + ( ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’๐‘  ๐‘–๐‘ ๐‘ ๐‘ข๐‘Ž๐‘๐‘™๐‘’ ๐‘“๐‘Ÿ๐‘œ๐‘š ๐‘†๐‘ก๐‘œ๐‘๐‘˜ ๐‘‚๐‘๐‘ก๐‘–๐‘œ๐‘› ) Coefficients of Variation: ๐ถ๐‘‰ ๐‘†๐‘Ž๐‘™๐‘’๐‘  = ๐‘†๐‘ก๐‘Ž๐‘›๐‘‘๐‘Ž๐‘Ÿ๐‘‘ ๐ท๐‘’๐‘ฃ๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐‘œ๐‘“ ๐‘†๐‘Ž๐‘™๐‘’๐‘  ๐‘€๐‘’๐‘Ž๐‘› ๐‘†๐‘Ž๐‘™๐‘’๐‘  ๐ถ๐‘‰ ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ = ๐‘†๐‘ก๐‘Ž๐‘›๐‘‘๐‘Ž๐‘Ÿ๐‘‘ ๐ท๐‘’๐‘ฃ๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐‘œ๐‘“ ๐‘œ๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘€๐‘’๐‘Ž๐‘› ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐ถ๐‘‰ ๐‘œ๐‘“ ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ = ๐‘†๐‘ก๐‘Ž๐‘›๐‘‘๐‘Ž๐‘Ÿ๐‘‘ ๐ท๐‘’๐‘ฃ๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐‘œ๐‘“ ๐‘›๐‘’๐‘ก ๐‘–๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘€๐‘’๐‘Ž๐‘› ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ Inventories: ๐ธ๐‘›๐‘‘๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ = ๐ต๐‘’๐‘”๐‘–๐‘›๐‘›๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ + ๐‘ƒ๐‘ข๐‘Ÿ๐‘โ„Ž๐‘Ž๐‘ ๐‘’๐‘  โˆ’ ๐ถ๐‘‚๐บ๐‘† ๐ถ๐‘ข๐‘Ÿ๐‘Ÿ๐‘’๐‘›๐‘ก ๐ถ๐‘œ๐‘ ๐‘ก ๐‘œ๐‘“ ๐ผ๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ (๐น๐ผ๐น๐‘‚) = ๐ฟ๐ผ๐น๐‘‚ ๐ผ๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ + ๐ฟ๐ผ๐น๐‘‚ ๐‘Ÿ๐‘’๐‘ ๐‘’๐‘Ÿ๐‘ฃ๐‘’ ๐ถ๐‘‚๐บ๐‘† ๐น๐ผ๐น๐‘‚ = ๐ถ๐‘‚๐บ๐‘† ๐ฟ๐ผ๐น๐‘‚ โˆ’ (๐ธ๐‘›๐‘‘๐‘–๐‘›๐‘” ๐ฟ๐ผ๐น๐‘‚ ๐‘Ÿ๐‘’๐‘ ๐‘’๐‘Ÿ๐‘ฃ๐‘’ โˆ’ ๐‘๐‘’๐‘”๐‘–๐‘›๐‘›๐‘–๐‘›๐‘” ๐ฟ๐ผ๐น๐‘‚ ๐‘Ÿ๐‘’๐‘ ๐‘’๐‘Ÿ๐‘ฃ๐‘’) Long-Lived Assets: ๐‘†๐‘ก๐‘Ÿ๐‘Ž๐‘–๐‘”โ„Ž๐‘ก โˆ’ ๐ฟ๐‘–๐‘›๐‘’ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› = ๐ถ๐‘œ๐‘ ๐‘ก โˆ’ ๐‘†๐‘Ž๐‘™๐‘ฃ๐‘Ž๐‘”๐‘’ ๐‘‰๐‘Ž๐‘™๐‘ข๐‘’ ๐‘ˆ๐‘ ๐‘’๐‘“๐‘ข๐‘™ ๐ฟ๐‘–๐‘“๐‘’ ๐ท๐ท๐ต ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› = ( 2 ๐‘ˆ๐‘ ๐‘’๐‘“๐‘ข๐‘™ ๐ฟ๐‘–๐‘“๐‘’ ) (๐ถ๐‘œ๐‘ ๐‘ก โˆ’ ๐ด๐‘๐‘๐‘ข๐‘š๐‘ข๐‘™๐‘Ž๐‘ก๐‘’๐‘‘ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘›) ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐ด๐‘”๐‘’ ๐‘–๐‘› ๐‘Œ๐‘’๐‘Ž๐‘Ÿ๐‘  = ๐ด๐‘๐‘๐‘ข๐‘š๐‘ข๐‘™๐‘Ž๐‘ก๐‘’๐‘‘ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐ด๐‘›๐‘›๐‘ข๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐ธ๐‘ฅ๐‘๐‘’๐‘›๐‘๐‘’ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘Ž๐‘”๐‘’ ๐‘Ž๐‘  ๐‘Ž ๐‘ƒ๐‘’๐‘Ÿ๐‘๐‘’๐‘›๐‘ก๐‘Ž๐‘”๐‘’ = ๐ด๐‘๐‘๐‘ข๐‘š๐‘ข๐‘™๐‘Ž๐‘ก๐‘’๐‘‘ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐ธ๐‘›๐‘‘๐‘–๐‘›๐‘” ๐บ๐‘Ÿ๐‘œ๐‘ ๐‘  ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก
๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘๐‘™๐‘’ ๐ฟ๐‘–๐‘“๐‘’ = ๐ธ๐‘›๐‘‘๐‘–๐‘›๐‘” ๐บ๐‘Ÿ๐‘œ๐‘ ๐‘  ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก ๐ด๐‘›๐‘›๐‘ข๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐ธ๐‘ฅ๐‘๐‘’๐‘›๐‘ ๐‘’ ๐‘…๐‘’๐‘š๐‘Ž๐‘–๐‘›๐‘–๐‘›๐‘” ๐‘ˆ๐‘ ๐‘’๐‘“๐‘ข๐‘™ ๐ฟ๐‘–๐‘“๐‘’ = ๐ธ๐‘›๐‘‘๐‘–๐‘›๐‘” ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก ๐ด๐‘›๐‘›๐‘ข๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐ธ๐‘ฅ๐‘๐‘’๐‘›๐‘ ๐‘’ Deferred Taxes: ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘‡๐‘Ž๐‘ฅ ๐ธ๐‘ฅ๐‘๐‘’๐‘›๐‘ ๐‘’ = ๐‘‡๐‘Ž๐‘ฅ๐‘’๐‘  ๐‘ƒ๐‘Ž๐‘ฆ๐‘Ž๐‘๐‘™๐‘’ + โˆ†๐ท๐‘‡๐ฟ โˆ’ โˆ†๐ท๐‘‡๐ด Debt Liabilities ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘  ๐ธ๐‘ฅ๐‘๐‘’๐‘›๐‘ ๐‘’ = ( ๐‘กโ„Ž๐‘’ ๐‘€๐‘Ž๐‘Ÿ๐‘˜๐‘’๐‘ก ๐‘…๐‘Ž๐‘ก๐‘’ ๐‘Ž๐‘ก ๐ผ๐‘ ๐‘ ๐‘ข๐‘’ ) ร— ( ๐‘กโ„Ž๐‘’ ๐ต๐‘Ž๐‘™๐‘Ž๐‘›๐‘๐‘’ ๐‘†โ„Ž๐‘’๐‘’๐‘ก ๐‘ฃ๐‘Ž๐‘™๐‘ข๐‘’ ๐‘œ๐‘“ ๐‘กโ„Ž๐‘’ ๐ฟ๐‘–๐‘Ž๐‘๐‘–๐‘™๐‘–๐‘ก๐‘ฆ ๐‘Ž๐‘ก ๐‘กโ„Ž๐‘’ ๐‘๐‘’๐‘”๐‘–๐‘›๐‘›๐‘–๐‘›๐‘” ๐‘œ๐‘“ ๐‘กโ„Ž๐‘’ ๐‘ƒ๐‘’๐‘Ÿ๐‘–๐‘œ๐‘‘ ) Performance Ratios ๐ถ๐‘Ž๐‘ โ„Ž ๐‘“๐‘™๐‘œ๐‘ค โˆ’ ๐‘ก๐‘œ โˆ’ ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ = ๐ถ๐น๐‘‚ ๐‘๐‘’๐‘ก ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐ถ๐‘Ž๐‘ โ„Ž ๐‘Ÿ๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› โˆ’ ๐‘œ๐‘› โˆ’ ๐ด๐‘ ๐‘ ๐‘’๐‘ก = ๐ถ๐น๐‘‚ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐ถ๐‘Ž๐‘ โ„Ž ๐‘Ÿ๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› โˆ’ ๐‘œ๐‘› โˆ’ ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ = ๐ถ๐น๐‘‚ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ ๐ถ๐‘Ž๐‘ โ„Ž โˆ’ ๐‘ก๐‘œ โˆ’ ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ = ๐ถ๐น๐‘‚ ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐ถ๐‘Ž๐‘ โ„Ž ๐‘“๐‘™๐‘œ๐‘ค ๐‘๐‘’๐‘Ÿ ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’ = ๐ถ๐น๐‘‚ โˆ’ ๐‘ƒ๐‘Ÿ๐‘’๐‘“๐‘’๐‘Ÿ๐‘Ÿ๐‘’๐‘›๐‘๐‘’ ๐ท๐‘–๐‘ฃ๐‘–๐‘‘๐‘’๐‘›๐‘‘๐‘  ๐‘Š๐‘’๐‘–๐‘”โ„Ž๐‘ก๐‘’๐‘‘ ๐‘Ž๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘›๐‘œ. ๐‘œ๐‘“ ๐ถ๐‘œ๐‘š๐‘š๐‘œ๐‘› ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’๐‘  Coverage Ratios ๐ท๐‘’๐‘๐‘ก ๐ถ๐‘œ๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ = ๐ถ๐น๐‘‚ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘ก ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐ถ๐‘œ๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ = ๐ถ๐น๐‘‚ + ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘ƒ๐‘Ž๐‘–๐‘‘ + ๐‘‡๐‘Ž๐‘ฅ๐‘’๐‘  ๐‘ƒ๐‘Ž๐‘–๐‘‘ ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘ƒ๐‘Ž๐‘–๐‘‘ ๐‘…๐‘’๐‘–๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก = ๐ถ๐น๐‘‚ ๐ถ๐‘Ž๐‘ โ„Ž ๐‘ƒ๐‘Ž๐‘–๐‘‘ ๐‘“๐‘œ๐‘Ÿ ๐ฟ๐‘œ๐‘›๐‘” ๐‘‡๐‘’๐‘Ÿ๐‘š ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘ 
๐ท๐‘’๐‘๐‘ก ๐‘…๐‘’๐‘๐‘Ž๐‘ฆ๐‘š๐‘’๐‘›๐‘ก = ๐ถ๐น๐‘‚ ๐ถ๐‘Ž๐‘ โ„Ž ๐‘“๐‘œ๐‘Ÿ ๐ฟ๐‘œ๐‘›๐‘”๐‘ก๐‘’๐‘Ÿ๐‘š ๐ท๐‘’๐‘๐‘ก ๐‘…๐‘’๐‘๐‘Ž๐‘ฆ๐‘š๐‘’๐‘›๐‘ก ๐ท๐‘–๐‘ฃ๐‘–๐‘‘๐‘’๐‘›๐‘‘ ๐‘ƒ๐‘Ž๐‘ฆ๐‘š๐‘’๐‘›๐‘ก๐‘  = ๐ถ๐น๐‘‚ ๐ท๐‘–๐‘ฃ๐‘–๐‘‘๐‘’๐‘›๐‘‘๐‘  ๐‘ƒ๐‘Ž๐‘–๐‘‘ ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘–๐‘›๐‘” & ๐น๐‘–๐‘›๐‘Ž๐‘›๐‘๐‘–๐‘›๐‘” = ๐ถ๐น๐‘‚ ๐ถ๐‘Ž๐‘ โ„Ž ๐‘‚๐‘ข๐‘ก๐‘“๐‘™๐‘œ๐‘ค๐‘  ๐‘“๐‘Ÿ๐‘œ๐‘š ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘–๐‘›๐‘” ๐‘Ž๐‘›๐‘‘ ๐น๐‘–๐‘›๐‘Ž๐‘›๐‘๐‘–๐‘›๐‘” ๐ด๐‘๐‘ก๐‘–๐‘ฃ๐‘–๐‘ก๐‘–๐‘’๐‘ 

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ย 

Financial Ratios and Formulas for Analysis

  • 1. Financial Ratio & Formulas Activity Ratios: ๐‘…๐‘’๐‘๐‘’๐‘–๐‘ฃ๐‘Ž๐‘๐‘™๐‘’๐‘  ๐‘‡๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ = ๐ด๐‘›๐‘›๐‘ข๐‘Ž๐‘™ ๐‘†๐‘Ž๐‘™๐‘’๐‘  ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘…๐‘’๐‘๐‘’๐‘–๐‘ฃ๐‘Ž๐‘๐‘™๐‘’๐‘  ๐ท๐‘Ž๐‘ฆ๐‘  ๐‘œ๐‘“ ๐‘ ๐‘Ž๐‘™๐‘’๐‘  ๐‘œ๐‘ข๐‘ก๐‘ ๐‘ก๐‘Ž๐‘›๐‘‘๐‘–๐‘›๐‘” = 365 ๐‘…๐‘’๐‘๐‘’๐‘–๐‘ฃ๐‘Ž๐‘๐‘™๐‘’๐‘  ๐‘‡๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ ๐ผ๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ ๐‘‡๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ = ๐ถ๐‘œ๐‘ ๐‘ก ๐‘œ๐‘“ ๐‘”๐‘œ๐‘œ๐‘‘๐‘  ๐‘ ๐‘œ๐‘™๐‘‘ ๐‘Ž๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘–๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ ๐ท๐‘Ž๐‘ฆ๐‘  ๐‘œ๐‘“ ๐‘–๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ ๐‘œ๐‘› โ„Ž๐‘Ž๐‘›๐‘‘ = 365 ๐‘–๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ ๐‘ก๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ ๐‘ƒ๐‘Ž๐‘ฆ๐‘Ž๐‘๐‘™๐‘’๐‘  ๐‘‡๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ = ๐‘ƒ๐‘ข๐‘Ÿ๐‘โ„Ž๐‘Ž๐‘ ๐‘’๐‘  ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘ก๐‘Ÿ๐‘Ž๐‘‘๐‘’๐‘  ๐‘๐‘Ž๐‘ฆ๐‘Ž๐‘๐‘™๐‘’ ๐‘๐‘œ. ๐‘œ๐‘“ ๐‘‘๐‘Ž๐‘ฆ๐‘  ๐‘œ๐‘“ ๐‘๐‘Ž๐‘ฆ๐‘Ž๐‘๐‘™๐‘’๐‘  = 356 ๐‘๐‘Ž๐‘ฆ๐‘Ž๐‘๐‘™๐‘’๐‘  ๐‘ก๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ ๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘œ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐‘Ž๐‘ ๐‘ ๐‘’๐‘ก ๐‘ก๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ = ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘ก๐‘œ๐‘ก๐‘Ž๐‘™ ๐‘Ž๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐น๐‘–๐‘ฅ๐‘’๐‘‘ ๐‘Ž๐‘ ๐‘ ๐‘’๐‘ก ๐‘‡๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ = ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘›๐‘’๐‘ก ๐‘“๐‘–๐‘ฅ๐‘’๐‘‘ ๐‘Ž๐‘ ๐‘ ๐‘’๐‘ก ๐‘Š๐‘œ๐‘Ÿ๐‘˜๐‘–๐‘›๐‘” ๐‘๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ ๐‘‡๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ = ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘ค๐‘œ๐‘Ÿ๐‘˜๐‘–๐‘›๐‘” ๐‘๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ Liquidity Ratio: ๐ถ๐‘ข๐‘Ÿ๐‘Ÿ๐‘’๐‘›๐‘ก ๐‘…๐‘Ž๐‘ก๐‘–๐‘œ = ๐ถ๐‘ข๐‘Ÿ๐‘Ÿ๐‘’๐‘›๐‘ก ๐ด๐‘ ๐‘ ๐‘’๐‘ก ๐ถ๐‘ข๐‘Ÿ๐‘Ÿ๐‘’๐‘›๐‘ก ๐ฟ๐‘–๐‘Ž๐‘๐‘–๐‘™๐‘–๐‘ก๐‘–๐‘’๐‘  ๐‘„๐‘ข๐‘–๐‘๐‘˜ ๐‘…๐‘Ž๐‘ก๐‘–๐‘œ = ๐ถ๐‘Ž๐‘ โ„Ž + ๐‘€๐‘Ž๐‘Ÿ๐‘˜๐‘’๐‘ก๐‘Ž๐‘๐‘™๐‘’ ๐‘ ๐‘’๐‘๐‘ข๐‘Ÿ๐‘–๐‘ก๐‘–๐‘’๐‘  + ๐‘…๐‘’๐‘๐‘’๐‘–๐‘ฃ๐‘Ž๐‘๐‘™๐‘’๐‘  ๐ถ๐‘ข๐‘Ÿ๐‘Ÿ๐‘’๐‘›๐‘ก ๐ฟ๐‘–๐‘Ž๐‘๐‘–๐‘™๐‘–๐‘ก๐‘–๐‘’๐‘  ๐ถ๐‘Ž๐‘ โ„Ž ๐‘…๐‘Ž๐‘ก๐‘–๐‘œ = ๐ถ๐‘Ž๐‘ โ„Ž + ๐‘€๐‘Ž๐‘Ÿ๐‘˜๐‘’๐‘ก๐‘Ž๐‘๐‘™๐‘’ ๐‘†๐‘’๐‘๐‘ข๐‘Ÿ๐‘–๐‘ก๐‘–๐‘’๐‘  ๐ถ๐‘ข๐‘Ÿ๐‘Ÿ๐‘’๐‘›๐‘ก ๐ฟ๐‘–๐‘Ž๐‘๐‘–๐‘™๐‘–๐‘ก๐‘–๐‘’๐‘ 
  • 2. ๐ท๐‘’๐‘“๐‘’๐‘›๐‘ ๐‘–๐‘ฃ๐‘’ ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘›๐‘Ž๐‘™ = ๐ถ๐‘Ž๐‘ โ„Ž + ๐‘€๐‘Ž๐‘Ÿ๐‘˜๐‘’๐‘ก๐‘Ž๐‘๐‘™๐‘’ ๐‘ ๐‘’๐‘๐‘ข๐‘Ÿ๐‘–๐‘ก๐‘–๐‘’๐‘  + ๐‘…๐‘’๐‘๐‘’๐‘–๐‘ฃ๐‘Ž๐‘๐‘™๐‘’๐‘  ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‘๐‘Ž๐‘–๐‘™๐‘ฆ ๐‘’๐‘ฅ๐‘๐‘’๐‘›๐‘‘๐‘–๐‘ก๐‘ข๐‘Ÿ๐‘’ ๐ถ๐‘Ž๐‘ โ„Ž ๐ถ๐‘œ๐‘›๐‘ฃ๐‘’๐‘Ÿ๐‘ ๐‘–๐‘œ๐‘› ๐ถ๐‘ฆ๐‘๐‘™๐‘’ = ( ๐ท๐‘Ž๐‘–๐‘™๐‘ฆ ๐‘†๐‘Ž๐‘™๐‘’๐‘  ๐‘‚๐‘ข๐‘ก๐‘ ๐‘ก๐‘Ž๐‘›๐‘‘๐‘–๐‘›๐‘” ) + ( ๐ท๐‘Ž๐‘ฆ๐‘  ๐‘œ๐‘“ ๐‘–๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ ๐‘œ๐‘› โ„Ž๐‘Ž๐‘›๐‘‘ ) โˆ’ ( ๐‘๐‘ข๐‘š๐‘๐‘’๐‘Ÿ ๐‘œ๐‘“ ๐‘‘๐‘Ž๐‘ฆ๐‘  ๐‘œ๐‘“ ๐‘๐‘Ž๐‘ฆ๐‘Ž๐‘๐‘™๐‘’ ) Solvency Ratios: ๐ท๐‘’๐‘๐‘ก โˆ’ ๐‘ก๐‘œ โˆ’ ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ = ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘ก ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’โ„Ž๐‘œ๐‘™๐‘‘๐‘’๐‘Ÿโ€ฒ ๐‘  ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ ๐ท๐‘’๐‘๐‘ก โˆ’ ๐‘ก๐‘œ โˆ’ ๐ถ๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ = ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘ก ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘ก + ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’โ„Ž๐‘œ๐‘™๐‘‘๐‘’๐‘Ÿโ€ฒ ๐‘  ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ ๐ท๐‘’๐‘๐‘ก โˆ’ ๐‘ก๐‘œ โˆ’ ๐ด๐‘ ๐‘ ๐‘’๐‘ก = ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘ก ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐น๐‘–๐‘›๐‘Ž๐‘›๐‘๐‘–๐‘Ž๐‘™ ๐ฟ๐‘’๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ = ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐ถ๐‘œ๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ = ๐ธ๐‘Ž๐‘Ÿ๐‘›๐‘–๐‘›๐‘”๐‘  ๐‘๐‘’๐‘“๐‘œ๐‘Ÿ๐‘’ ๐‘–๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ก๐‘  ๐‘Ž๐‘›๐‘‘ ๐‘ก๐‘Ž๐‘ฅ๐‘’๐‘  ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘ƒ๐‘Ž๐‘ฆ๐‘š๐‘’๐‘›๐‘ก๐‘  ๐น๐‘–๐‘ฅ๐‘’๐‘‘ ๐ถโ„Ž๐‘Ž๐‘Ÿ๐‘”๐‘’ ๐ถ๐‘œ๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ = ๐ธ๐‘Ž๐‘Ÿ๐‘›๐‘–๐‘›๐‘”๐‘  ๐‘๐‘’๐‘“๐‘œ๐‘Ÿ๐‘’ ๐‘–๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘Ž๐‘›๐‘‘ ๐‘ก๐‘Ž๐‘ฅ๐‘’๐‘  + ๐ฟ๐‘’๐‘Ž๐‘ ๐‘’ ๐‘ƒ๐‘Ž๐‘ฆ๐‘š๐‘’๐‘›๐‘ก๐‘  ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘ƒ๐‘Ž๐‘ฆ๐‘š๐‘’๐‘›๐‘ก๐‘  + ๐ฟ๐‘’๐‘Ž๐‘ ๐‘’ ๐‘ƒ๐‘Ž๐‘ฆ๐‘š๐‘’๐‘›๐‘ก๐‘  Profitability Ratios ๐‘๐‘’๐‘ก ๐‘ƒ๐‘Ÿ๐‘œ๐‘“๐‘–๐‘ก ๐‘€๐‘Ž๐‘Ÿ๐‘”๐‘–๐‘› = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐บ๐‘Ÿ๐‘œ๐‘ ๐‘  ๐‘ƒ๐‘Ÿ๐‘œ๐‘“๐‘–๐‘ก ๐‘€๐‘Ž๐‘Ÿ๐‘”๐‘–๐‘› = ๐บ๐‘Ÿ๐‘œ๐‘ ๐‘  ๐‘ƒ๐‘Ÿ๐‘œ๐‘“๐‘–๐‘ก ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐‘ƒ๐‘Ÿ๐‘œ๐‘“๐‘–๐‘ก ๐‘€๐‘Ž๐‘Ÿ๐‘”๐‘–๐‘› = ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐‘‚๐‘… ๐ธ๐ต๐ผ๐‘‡ ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐‘ƒ๐‘Ÿ๐‘’๐‘ก๐‘Ž๐‘ฅ ๐‘€๐‘Ž๐‘Ÿ๐‘”๐‘–๐‘› = ๐ธ๐ต๐‘‡ ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’
  • 3. ๐‘…๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› ๐‘œ๐‘› ๐ด๐‘ ๐‘ ๐‘’๐‘ก (๐‘…๐‘‚๐ด) = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐‘…๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› ๐‘œ๐‘› ๐ด๐‘ ๐‘ ๐‘’๐‘ก (๐‘…๐‘‚๐ด) = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ + ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘’๐‘ฅ๐‘๐‘’๐‘›๐‘ ๐‘’(1 โˆ’ ๐‘ก๐‘Ž๐‘ฅ ๐‘Ÿ๐‘Ž๐‘ก๐‘’) ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐‘…๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› ๐‘œ๐‘› ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  = ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐‘‚๐‘… ๐ธ๐ต๐ผ๐‘‡ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘ก๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐‘…๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› ๐‘œ๐‘› ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ถ๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ = ๐ธ๐ต๐ผ๐‘‡ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ถ๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ ๐‘…๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› ๐‘œ๐‘› ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ ๐‘…๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› ๐‘œ๐‘› ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ โˆ’ ๐‘ƒ๐‘Ÿ๐‘’๐‘“๐‘’๐‘Ÿ๐‘Ÿ๐‘’๐‘‘ ๐ท๐‘’๐‘ฃ๐‘–๐‘‘๐‘’๐‘›๐‘‘ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐ถ๐‘œ๐‘š๐‘š๐‘œ๐‘› ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘Ž๐‘ฃ๐‘Ž๐‘–๐‘™๐‘Ž๐‘๐‘™๐‘’ ๐‘ก๐‘œ ๐ถ๐‘œ๐‘š๐‘š๐‘œ๐‘› ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐ถ๐‘œ๐‘š๐‘š๐‘œ๐‘› ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ Free Cash Flow to Firm: ๐น๐ถ๐น๐น = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ + ๐‘๐‘œ๐‘›๐‘๐‘Ž๐‘ โ„Ž ๐‘โ„Ž๐‘Ž๐‘Ÿ๐‘”๐‘’ + [๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘’๐‘ฅ๐‘๐‘’๐‘›๐‘ ๐‘’ ร— (1 โˆ’ ๐‘‡๐‘Ž๐‘ฅ ๐‘Ÿ๐‘Ž๐‘ก๐‘’)] โˆ’ ๐น๐‘–๐‘ฅ๐‘’๐‘‘ ๐ถ๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก โˆ’ ๐‘Š๐‘œ๐‘Ÿ๐‘˜๐‘–๐‘›๐‘” ๐ถ๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก ๐น๐ถ๐น๐น = ๐ถ๐‘Ž๐‘ โ„Ž ๐น๐‘™๐‘œ๐‘ค ๐‘“๐‘Ÿ๐‘œ๐‘š ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘œ๐‘›๐‘  + [๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘’๐‘ฅ๐‘๐‘’๐‘›๐‘ ๐‘’ ร— (1 โˆ’ ๐‘‡๐‘Ž๐‘ฅ ๐‘Ÿ๐‘Ž๐‘ก๐‘’)] โˆ’ ๐น๐‘–๐‘ฅ๐‘’๐‘‘ ๐ถ๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก Free Cash Flow from Equity: ๐น๐ถ๐น๐ธ = ๐ถ๐‘Ž๐‘ โ„Ž ๐น๐‘™๐‘œ๐‘ค ๐‘“๐‘Ÿ๐‘œ๐‘š ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘œ๐‘›๐‘  โˆ’ ๐น๐‘–๐‘ฅ๐‘’๐‘‘ ๐ถ๐‘Ž๐‘๐‘–๐‘ก๐‘Ž๐‘™ ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก + ๐‘๐‘’๐‘ก ๐ต๐‘œ๐‘Ÿ๐‘Ÿ๐‘œ๐‘ค๐‘–๐‘›๐‘” ๐ถ๐‘œ๐‘š๐‘š๐‘œ๐‘› โˆ’ ๐‘†๐‘–๐‘ง๐‘’ ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘†๐‘ก๐‘Ž๐‘ก๐‘’๐‘š๐‘’๐‘›๐‘ก ๐‘…๐‘Ž๐‘ก๐‘–๐‘œ๐‘  = ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘†๐‘ก๐‘Ž๐‘ก๐‘’๐‘š๐‘’๐‘›๐‘ก ๐ด๐‘๐‘๐‘œ๐‘ข๐‘›๐‘ก ๐‘†๐‘Ž๐‘™๐‘’๐‘  ๐ถ๐‘œ๐‘š๐‘š๐‘œ๐‘› โˆ’ ๐‘†๐‘–๐‘ง๐‘’ ๐ต๐‘Ž๐‘™๐‘Ž๐‘›๐‘๐‘’ ๐‘†โ„Ž๐‘’๐‘’๐‘ก ๐‘…๐‘Ž๐‘ก๐‘–๐‘œ๐‘  = ๐ต๐‘Ž๐‘™๐‘Ž๐‘›๐‘๐‘’ ๐‘†โ„Ž๐‘’๐‘’๐‘ก ๐ด๐‘๐‘๐‘œ๐‘ข๐‘›๐‘ก ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐Ž๐ซ๐ข๐ ๐ข๐ง๐š๐ฅ ๐ƒ๐ฎ๐๐จ๐ง๐ญ ๐„๐ช๐ฎ๐š๐ญ๐ข๐จ๐ง: ๐‘…๐‘‚๐ธ = ( ๐‘๐‘’๐‘ก ๐‘ƒ๐‘Ÿ๐‘œ๐‘“๐‘–๐‘ก ๐‘€๐‘Ž๐‘Ÿ๐‘”๐‘–๐‘› ) ( ๐ด๐‘ ๐‘ ๐‘’๐‘ก ๐‘‡๐‘ข๐‘Ÿ๐‘›๐‘œ๐‘ฃ๐‘’๐‘Ÿ ) ( ๐ฟ๐‘’๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘…๐‘Ž๐‘ก๐‘–๐‘œ ) ๐„๐ฑ๐ญ๐ž๐ง๐๐ž๐ ๐ƒ๐ฎ๐๐จ๐ง๐ญ ๐„๐ช๐ฎ๐š๐ญ๐ข๐จ๐ง: ๐‘…๐‘‚๐ธ = ( ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐ธ๐ต๐‘‡ ) ( ๐ธ๐ต๐‘‡ ๐ธ๐ต๐ผ๐‘‡ ) ( ๐ธ๐ต๐ผ๐‘‡ ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ) ( ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ) ( ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ )
  • 4. ๐ต๐‘Ž๐‘ ๐‘–๐‘ ๐ธ๐‘ƒ๐น = ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ โˆ’ ๐‘ƒ๐‘Ÿ๐‘’๐‘“๐‘’๐‘Ÿ๐‘Ÿ๐‘’๐‘‘ ๐ท๐‘–๐‘ฃ๐‘–๐‘‘๐‘’๐‘›๐‘‘๐‘  ๐‘Š๐‘’๐‘–๐‘”โ„Ž๐‘ก๐‘’๐‘‘ ๐‘Ž๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘›๐‘œ. ๐‘œ๐‘“ ๐‘๐‘œ๐‘š๐‘š๐‘œ๐‘› ๐‘ โ„Ž๐‘Ž๐‘Ÿ๐‘’๐‘  ๐‘œ๐‘ข๐‘ก๐‘ ๐‘ก๐‘Ž๐‘›๐‘‘๐‘–๐‘›๐‘” ๐ท๐‘–๐‘™๐‘ข๐‘ก๐‘’๐‘‘ ๐ธ๐‘ƒ๐‘† = ( ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ โˆ’ ๐‘ƒ๐‘Ÿ๐‘’๐‘“๐‘“๐‘’๐‘Ÿ๐‘’๐‘‘ ๐ท๐‘–๐‘ฃ๐‘–๐‘‘๐‘’๐‘›๐‘‘ ) + ( ๐ถ๐‘œ๐‘›๐‘ฃ๐‘’๐‘Ÿ๐‘ก๐‘–๐‘๐‘™๐‘’ ๐‘ƒ๐‘Ÿ๐‘’๐‘“๐‘’๐‘Ÿ๐‘Ÿ๐‘’๐‘‘ ๐‘‘๐‘–๐‘ฃ๐‘–๐‘‘๐‘’๐‘›๐‘‘ ) + ( ๐ถ๐‘œ๐‘›๐‘ฃ๐‘’๐‘Ÿ๐‘ก๐‘–๐‘๐‘™๐‘’ ๐ท๐‘’๐‘๐‘ก ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ) (1 โˆ’ ๐‘ก) ( ๐‘Š๐‘’๐‘–๐‘”โ„Ž๐‘ก๐‘’๐‘‘ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’๐‘  ) + ( ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’๐‘  ๐‘“๐‘Ÿ๐‘œ๐‘š ๐ถ๐‘œ๐‘›๐‘ฃ๐‘’๐‘Ÿ๐‘ ๐‘–๐‘œ๐‘› ๐‘œ๐‘“ ๐ถ๐‘œ๐‘›๐‘ฃ. ๐‘๐‘“๐‘‘. ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’๐‘  ) + ( ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’๐‘  ๐‘“๐‘Ÿ๐‘œ๐‘š ๐ถ๐‘œ๐‘›๐‘ฃ๐‘’๐‘Ÿ๐‘ ๐‘–๐‘œ๐‘› ๐‘œ๐‘“ ๐ถ๐‘œ๐‘›๐‘ฃ. ๐ท๐‘’๐‘๐‘ก ) + ( ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’๐‘  ๐‘–๐‘ ๐‘ ๐‘ข๐‘Ž๐‘๐‘™๐‘’ ๐‘“๐‘Ÿ๐‘œ๐‘š ๐‘†๐‘ก๐‘œ๐‘๐‘˜ ๐‘‚๐‘๐‘ก๐‘–๐‘œ๐‘› ) Coefficients of Variation: ๐ถ๐‘‰ ๐‘†๐‘Ž๐‘™๐‘’๐‘  = ๐‘†๐‘ก๐‘Ž๐‘›๐‘‘๐‘Ž๐‘Ÿ๐‘‘ ๐ท๐‘’๐‘ฃ๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐‘œ๐‘“ ๐‘†๐‘Ž๐‘™๐‘’๐‘  ๐‘€๐‘’๐‘Ž๐‘› ๐‘†๐‘Ž๐‘™๐‘’๐‘  ๐ถ๐‘‰ ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ = ๐‘†๐‘ก๐‘Ž๐‘›๐‘‘๐‘Ž๐‘Ÿ๐‘‘ ๐ท๐‘’๐‘ฃ๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐‘œ๐‘“ ๐‘œ๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘€๐‘’๐‘Ž๐‘› ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐ถ๐‘‰ ๐‘œ๐‘“ ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ = ๐‘†๐‘ก๐‘Ž๐‘›๐‘‘๐‘Ž๐‘Ÿ๐‘‘ ๐ท๐‘’๐‘ฃ๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐‘œ๐‘“ ๐‘›๐‘’๐‘ก ๐‘–๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘€๐‘’๐‘Ž๐‘› ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ Inventories: ๐ธ๐‘›๐‘‘๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ = ๐ต๐‘’๐‘”๐‘–๐‘›๐‘›๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ + ๐‘ƒ๐‘ข๐‘Ÿ๐‘โ„Ž๐‘Ž๐‘ ๐‘’๐‘  โˆ’ ๐ถ๐‘‚๐บ๐‘† ๐ถ๐‘ข๐‘Ÿ๐‘Ÿ๐‘’๐‘›๐‘ก ๐ถ๐‘œ๐‘ ๐‘ก ๐‘œ๐‘“ ๐ผ๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ (๐น๐ผ๐น๐‘‚) = ๐ฟ๐ผ๐น๐‘‚ ๐ผ๐‘›๐‘ฃ๐‘’๐‘›๐‘ก๐‘œ๐‘Ÿ๐‘ฆ + ๐ฟ๐ผ๐น๐‘‚ ๐‘Ÿ๐‘’๐‘ ๐‘’๐‘Ÿ๐‘ฃ๐‘’ ๐ถ๐‘‚๐บ๐‘† ๐น๐ผ๐น๐‘‚ = ๐ถ๐‘‚๐บ๐‘† ๐ฟ๐ผ๐น๐‘‚ โˆ’ (๐ธ๐‘›๐‘‘๐‘–๐‘›๐‘” ๐ฟ๐ผ๐น๐‘‚ ๐‘Ÿ๐‘’๐‘ ๐‘’๐‘Ÿ๐‘ฃ๐‘’ โˆ’ ๐‘๐‘’๐‘”๐‘–๐‘›๐‘›๐‘–๐‘›๐‘” ๐ฟ๐ผ๐น๐‘‚ ๐‘Ÿ๐‘’๐‘ ๐‘’๐‘Ÿ๐‘ฃ๐‘’) Long-Lived Assets: ๐‘†๐‘ก๐‘Ÿ๐‘Ž๐‘–๐‘”โ„Ž๐‘ก โˆ’ ๐ฟ๐‘–๐‘›๐‘’ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› = ๐ถ๐‘œ๐‘ ๐‘ก โˆ’ ๐‘†๐‘Ž๐‘™๐‘ฃ๐‘Ž๐‘”๐‘’ ๐‘‰๐‘Ž๐‘™๐‘ข๐‘’ ๐‘ˆ๐‘ ๐‘’๐‘“๐‘ข๐‘™ ๐ฟ๐‘–๐‘“๐‘’ ๐ท๐ท๐ต ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› = ( 2 ๐‘ˆ๐‘ ๐‘’๐‘“๐‘ข๐‘™ ๐ฟ๐‘–๐‘“๐‘’ ) (๐ถ๐‘œ๐‘ ๐‘ก โˆ’ ๐ด๐‘๐‘๐‘ข๐‘š๐‘ข๐‘™๐‘Ž๐‘ก๐‘’๐‘‘ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘›) ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐ด๐‘”๐‘’ ๐‘–๐‘› ๐‘Œ๐‘’๐‘Ž๐‘Ÿ๐‘  = ๐ด๐‘๐‘๐‘ข๐‘š๐‘ข๐‘™๐‘Ž๐‘ก๐‘’๐‘‘ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐ด๐‘›๐‘›๐‘ข๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐ธ๐‘ฅ๐‘๐‘’๐‘›๐‘๐‘’ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘Ž๐‘”๐‘’ ๐‘Ž๐‘  ๐‘Ž ๐‘ƒ๐‘’๐‘Ÿ๐‘๐‘’๐‘›๐‘ก๐‘Ž๐‘”๐‘’ = ๐ด๐‘๐‘๐‘ข๐‘š๐‘ข๐‘™๐‘Ž๐‘ก๐‘’๐‘‘ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐ธ๐‘›๐‘‘๐‘–๐‘›๐‘” ๐บ๐‘Ÿ๐‘œ๐‘ ๐‘  ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก
  • 5. ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘๐‘™๐‘’ ๐ฟ๐‘–๐‘“๐‘’ = ๐ธ๐‘›๐‘‘๐‘–๐‘›๐‘” ๐บ๐‘Ÿ๐‘œ๐‘ ๐‘  ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก ๐ด๐‘›๐‘›๐‘ข๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐ธ๐‘ฅ๐‘๐‘’๐‘›๐‘ ๐‘’ ๐‘…๐‘’๐‘š๐‘Ž๐‘–๐‘›๐‘–๐‘›๐‘” ๐‘ˆ๐‘ ๐‘’๐‘“๐‘ข๐‘™ ๐ฟ๐‘–๐‘“๐‘’ = ๐ธ๐‘›๐‘‘๐‘–๐‘›๐‘” ๐‘๐‘’๐‘ก ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก ๐ด๐‘›๐‘›๐‘ข๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘Ÿ๐‘’๐‘๐‘–๐‘Ž๐‘ก๐‘–๐‘œ๐‘› ๐ธ๐‘ฅ๐‘๐‘’๐‘›๐‘ ๐‘’ Deferred Taxes: ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐‘‡๐‘Ž๐‘ฅ ๐ธ๐‘ฅ๐‘๐‘’๐‘›๐‘ ๐‘’ = ๐‘‡๐‘Ž๐‘ฅ๐‘’๐‘  ๐‘ƒ๐‘Ž๐‘ฆ๐‘Ž๐‘๐‘™๐‘’ + โˆ†๐ท๐‘‡๐ฟ โˆ’ โˆ†๐ท๐‘‡๐ด Debt Liabilities ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘  ๐ธ๐‘ฅ๐‘๐‘’๐‘›๐‘ ๐‘’ = ( ๐‘กโ„Ž๐‘’ ๐‘€๐‘Ž๐‘Ÿ๐‘˜๐‘’๐‘ก ๐‘…๐‘Ž๐‘ก๐‘’ ๐‘Ž๐‘ก ๐ผ๐‘ ๐‘ ๐‘ข๐‘’ ) ร— ( ๐‘กโ„Ž๐‘’ ๐ต๐‘Ž๐‘™๐‘Ž๐‘›๐‘๐‘’ ๐‘†โ„Ž๐‘’๐‘’๐‘ก ๐‘ฃ๐‘Ž๐‘™๐‘ข๐‘’ ๐‘œ๐‘“ ๐‘กโ„Ž๐‘’ ๐ฟ๐‘–๐‘Ž๐‘๐‘–๐‘™๐‘–๐‘ก๐‘ฆ ๐‘Ž๐‘ก ๐‘กโ„Ž๐‘’ ๐‘๐‘’๐‘”๐‘–๐‘›๐‘›๐‘–๐‘›๐‘” ๐‘œ๐‘“ ๐‘กโ„Ž๐‘’ ๐‘ƒ๐‘’๐‘Ÿ๐‘–๐‘œ๐‘‘ ) Performance Ratios ๐ถ๐‘Ž๐‘ โ„Ž ๐‘“๐‘™๐‘œ๐‘ค โˆ’ ๐‘ก๐‘œ โˆ’ ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ = ๐ถ๐น๐‘‚ ๐‘๐‘’๐‘ก ๐‘…๐‘’๐‘ฃ๐‘’๐‘›๐‘ข๐‘’ ๐ถ๐‘Ž๐‘ โ„Ž ๐‘Ÿ๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› โˆ’ ๐‘œ๐‘› โˆ’ ๐ด๐‘ ๐‘ ๐‘’๐‘ก = ๐ถ๐น๐‘‚ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘  ๐ถ๐‘Ž๐‘ โ„Ž ๐‘Ÿ๐‘’๐‘ก๐‘ข๐‘Ÿ๐‘› โˆ’ ๐‘œ๐‘› โˆ’ ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ = ๐ถ๐น๐‘‚ ๐ด๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ธ๐‘ž๐‘ข๐‘–๐‘ก๐‘ฆ ๐ถ๐‘Ž๐‘ โ„Ž โˆ’ ๐‘ก๐‘œ โˆ’ ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ = ๐ถ๐น๐‘‚ ๐‘‚๐‘๐‘’๐‘Ÿ๐‘Ž๐‘ก๐‘–๐‘›๐‘” ๐ผ๐‘›๐‘๐‘œ๐‘š๐‘’ ๐ถ๐‘Ž๐‘ โ„Ž ๐‘“๐‘™๐‘œ๐‘ค ๐‘๐‘’๐‘Ÿ ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’ = ๐ถ๐น๐‘‚ โˆ’ ๐‘ƒ๐‘Ÿ๐‘’๐‘“๐‘’๐‘Ÿ๐‘Ÿ๐‘’๐‘›๐‘๐‘’ ๐ท๐‘–๐‘ฃ๐‘–๐‘‘๐‘’๐‘›๐‘‘๐‘  ๐‘Š๐‘’๐‘–๐‘”โ„Ž๐‘ก๐‘’๐‘‘ ๐‘Ž๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ ๐‘›๐‘œ. ๐‘œ๐‘“ ๐ถ๐‘œ๐‘š๐‘š๐‘œ๐‘› ๐‘†โ„Ž๐‘Ž๐‘Ÿ๐‘’๐‘  Coverage Ratios ๐ท๐‘’๐‘๐‘ก ๐ถ๐‘œ๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ = ๐ถ๐น๐‘‚ ๐‘‡๐‘œ๐‘ก๐‘Ž๐‘™ ๐ท๐‘’๐‘๐‘ก ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐ถ๐‘œ๐‘ฃ๐‘’๐‘Ÿ๐‘Ž๐‘”๐‘’ = ๐ถ๐น๐‘‚ + ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘ƒ๐‘Ž๐‘–๐‘‘ + ๐‘‡๐‘Ž๐‘ฅ๐‘’๐‘  ๐‘ƒ๐‘Ž๐‘–๐‘‘ ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก ๐‘ƒ๐‘Ž๐‘–๐‘‘ ๐‘…๐‘’๐‘–๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘š๐‘’๐‘›๐‘ก = ๐ถ๐น๐‘‚ ๐ถ๐‘Ž๐‘ โ„Ž ๐‘ƒ๐‘Ž๐‘–๐‘‘ ๐‘“๐‘œ๐‘Ÿ ๐ฟ๐‘œ๐‘›๐‘” ๐‘‡๐‘’๐‘Ÿ๐‘š ๐ด๐‘ ๐‘ ๐‘’๐‘ก๐‘ 
  • 6. ๐ท๐‘’๐‘๐‘ก ๐‘…๐‘’๐‘๐‘Ž๐‘ฆ๐‘š๐‘’๐‘›๐‘ก = ๐ถ๐น๐‘‚ ๐ถ๐‘Ž๐‘ โ„Ž ๐‘“๐‘œ๐‘Ÿ ๐ฟ๐‘œ๐‘›๐‘”๐‘ก๐‘’๐‘Ÿ๐‘š ๐ท๐‘’๐‘๐‘ก ๐‘…๐‘’๐‘๐‘Ž๐‘ฆ๐‘š๐‘’๐‘›๐‘ก ๐ท๐‘–๐‘ฃ๐‘–๐‘‘๐‘’๐‘›๐‘‘ ๐‘ƒ๐‘Ž๐‘ฆ๐‘š๐‘’๐‘›๐‘ก๐‘  = ๐ถ๐น๐‘‚ ๐ท๐‘–๐‘ฃ๐‘–๐‘‘๐‘’๐‘›๐‘‘๐‘  ๐‘ƒ๐‘Ž๐‘–๐‘‘ ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘–๐‘›๐‘” & ๐น๐‘–๐‘›๐‘Ž๐‘›๐‘๐‘–๐‘›๐‘” = ๐ถ๐น๐‘‚ ๐ถ๐‘Ž๐‘ โ„Ž ๐‘‚๐‘ข๐‘ก๐‘“๐‘™๐‘œ๐‘ค๐‘  ๐‘“๐‘Ÿ๐‘œ๐‘š ๐ผ๐‘›๐‘ฃ๐‘’๐‘ ๐‘ก๐‘–๐‘›๐‘” ๐‘Ž๐‘›๐‘‘ ๐น๐‘–๐‘›๐‘Ž๐‘›๐‘๐‘–๐‘›๐‘” ๐ด๐‘๐‘ก๐‘–๐‘ฃ๐‘–๐‘ก๐‘–๐‘’๐‘