AssetsCapital + Liabilities
AssetsCapital Introduced + (Income -Expenses ) -Drawings + Liabilities
Shareholders’ EquityCapital Stock + Retained Earnings
Net IncomeRevenue – Expenses
Net IncomeIncome from Operations + Interest Income -Income Taxes
Break Even PointSales-Fixed Costs-Variable Costs
Cash RatioCash ÷ Current Liabilities
Liquidity Ratio
Current RatioCurrent Assets ÷ Current Liabilities
Quick Ratio(Cash + Marketable Securities + Accounts Receivable) ÷ Current Liabilities
Cash RatioCash and Cash Equivalents ÷ Current Liabilities
Defensive Interval RatioCurrent Assets ÷ Daily Expenditures
Working CapitalCurrent Assets – Current Liabilities
Activity/Turnover Ratio
Accounts Receivable Turnover RatioNet Credit Sales ÷ Average Accounts Receivable
Average Receivable Collection Day365 ÷ Account Receivable Turnover
Inventory Turnover RatioCost of Goods Sold ÷ Average Inventory
Average days inventory in stock365 ÷ Inventory Turnover
Payable TurnoverPurchase ÷ Average Accounts Payable
(Purchase = COGS +Change in inventory)
Average days payable outstanding365 ÷ Payable Turnover
Operating CycleReceivables Collection Days + Inventory Holding Days
Net Trade Cycle (Cash Cycle)Operating Cycle – Average Days Payable Outstanding
Working Capital TurnoverNet Sales ÷ Average Working Capital
Fixed Asset TurnoverNet Sales ÷ Average Net Fixed Assets
Asset TurnoverNet Sales ÷ Average Total Assets
Average PPE AgeAccumulated Depreciation ÷ Depreciation Expense
Profitability Ratios
Return on EquityNet Income ÷ Shareholder’s Equity
Return on AssetsNet Income ÷ Total Assets
Return on Capital EmployedEarning Before Income and Tax (EBIT) ÷ Capital Employed
(Capital Employed = Total Assets – Current Liabilities)
Gross Margin RatioGross Profit ÷ Total Revenue
(Gross Profit = Total Revenue – Cost of Goods Sold(COGS))
Operating Profit MarginOperating Profit(EBIT) ÷ Total Revenue
(EBIT = Total Revenue -COGS- Operating Expenses-Depreciation & Amortization)
Operating RatioOperating Cost ÷ Net Sales
Expense RatioTotal Expenses ÷ Net Sales
Earning Per Share (EPS)(Net Income-Preferred Dividend) ÷Weighted Common Share outstanding
Price to Earnings RatioShare Price ÷ Earnings Per Share
Market to Book RatioMarket value to Stock ÷ Book Value of equity
Dividend YieldCash Dividend paid per share of common equity ÷ Price Per Share
Dividend pay-out RatioDividend Per Share ÷ Earning Per Share
Book value per shareCommon Shareholders’ Equity ÷ Average Common Shares
Solvency Ratios
Debt to Total AssetsTotal Debt ÷ Total Assets
Debt to Equity Ratio(Short term debt + Long term debt + Other fixed Payments)÷ Shareholder’s Equity 
Equity RatioShareholders Equity ÷ Total Assets
Debt Ratio(Short term debt + Long term debt) ÷ Total Assets
Financial LeverageTotal (Average) Assets ÷ Total (Average) Shareholders’ Equity
Time Interest Earned RatioEarnings Before Interest & Taxes ÷ Interest Expense
Time Interest (Cash-Basis) Earned RatioAdjusted Operating Cash Flow ÷ Interest Expense
Operating Cash Flow RatioCash Flow From Operations ÷ Current Liabilities
Debt to Capital Employed RatioLong Term Debt ÷ Capital Employed
Proprietary RatioShareholders’ Fund ÷ Capital Employed ( Net Assets )
Interest Coverage RatioEarning before Interest and Tax ÷ Interest on long-term debts
Cash Coverage Ratio(EBIT + Depreciation) ÷ Interest
The Du Pont IdentityProfit Margin ✖ Total Asset Turnover ✖ Equity Multiplier
Equity MultiplierTotal Asset ÷ Total Equity
Capital Intensity RatioTotal Assets ÷ Sales

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