F300 Financial Ratios
Terms
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- Four (4) Categories of Financial Ratios
- Profitability, Asset Utilization, Liquidity, Financial Leverage
- List Three (3) Profitibality Ratios
- Profit Margin (PM), Return on Assets (ROA), Return on Equity (ROE)
- List Four (4) Asset Utilization Ratios
- Receivables Turnover (Rt), Average Collection Period (Avg(ARCP)), Inventory Turnover (It), Total Asset Turnover (TAT)
- List One (2) Liquidity Ratios
- Current Ratio, Quick Ratio
- List Three (3) Financial Leverage Ratios
- Debt to Equity, Equity Multiplier (Em), Debt Ratio
- What is the Simplified Dupont Identity?
- ROA = PM x TAT
- What is the Dupont Identity When Sales are considered in the equation?
- ROA = NI/Sales x Sales/Assets
- What is the Extended Dupont Identity?
- ROA = NI/Sales x Sales/Assets x Assets/Equity
- What is the entire Dupont System of Analysis?
-
(NI/Sales) = PM
(Sales/Assets) = TAT
PM * TAT = ROA
Debt/Assets = Financial Plan (FP)
ROA/(1 - FP) = ROE - How is Profit Margin Profitabilty Ratio Calculated?
- NI/Sales
- How is ROA Profitability Ratio Calculated?
- NI/Assets
- How is ROE Profitability Ratio Calculated?
- NI/Equity
- How is Receivables Turnover (Rt) Asset Utilitization Ratio Calculated?
- Sales/AR
- How is Avg Collection Period (ACP) Asset Utilization Ratio Calculated?
- AR/(Sales/365)
- How is Inventory Turnover (It) Asset Utilization Turnover Ratio Calculated?
- Sales/Inventory
- How is Total Asset Turnover (TAT) Asset Utilization Turnover calculated?
- TAT = Sales/Assets
- How is Current Liquidity Ratio calculated?
- CurRatio = CurAssets/CurLiabiliities
- How is the Quick Liquidity Ratio calculated?
- QuickRatio = (CurAssets - Inventory)/CurLiabilities
- How is Debt to Equity Financial Leverage Ratio calculated?
- (Lia/Equity)
- How is the Equity Multiplier (Em) Financial Leverage Ratio calculated?
- Em = Assets / Equity
- How is the Debt Ratio (a Financial Leverage Ratio) calculated?
- DebtRatio = Liabilities / Assets
- How is the Depreciation Tax Shield calculated?
- TaxShield = (Depreciation) x (Tax Rate)
- What is Net Operating Cash Flow (NOCF)?
- Cash flow resulting from day to day operations. This is the cash flow before capital expenditures and dividends are paid.
- How is Net Operating Cash Flow (NOCF) calculated?
-
Net Income = (+Revenues -Expenses -depreciation -Interest -Taxes)
Net Income + Depreciation - (+/-)NWC - How is Net Income calculated?
- Net Income = +Revenues -Expenses -depreciation -Interest -Taxes
- What is Free Cash Flow (FCF)?
- Free Cash Flow (FCF) is the cash flows available after neccessary capital expenditures, and dividends have been paid. Free Cash Flow is cash flow available for investment/growth.
- How is FV Calculated?
- FV = PV x (1 + i)^n
- How is PV calculated?
- PV = FV / (1 + i)^n
- How is (n) calculated?
- n = [ln(FV/PV)] / [ln(1 + i)]
- How is (i) calculated?
- i = [(FV/PV)^1/n] - 1
- How is the Periodic Rate (i) Calculated in terms of APR?
- i = APR/m
- How is the Periodic Rate (i) calculated in terms of EAR?
- i = [(1 + EAR)^(1/m)] - 1
- An Increase to an Asset Account is a Use or Source of cash?
- Use
- An Increase to a Liabilities Account is a Use or Source of cash?
- Source
- An Increase to an Equity Account is a Use or Source of cash?
- Source
- A Decrease to an Asset Account is a Use or Source of cash?
- Source
- A Decrease to a Liabilities Account is a Use or Source of cash?
- Use
- A Decrease to an Equity Account is a Use or Source of cash?
- Use
- How is the Present Values of an Annuity Calculated (PVA)?
- PVA = A x [ (1 - 1/((1+i)^n) ) / i ]
- How is the Present Value of a Perpetuity calculated? (PVP)
- PVP = A/i