Financial Ratios

  1. profitability ratios
    • ability of firm to earn adequate returns:
    • profit margin
    • return on assests
    • return on equity
  2. asset utilization ratios
    • speed at which firm is turning over; how many times per year a firm sells inventory or collects a/r; fixed assets generating sales:
    • recievable turnover
    • inventory turnover
    • fixed asset turnover
    • total asset turnover
    • average collection period
  3. liquidity ratios
    • firms ability to pay-off short term obligations:
    • current ratio
    • quick ratio
  4. debt utilization ratio
    • debt position of firm evaluated in terms of its asset base and earning power.
    • debt to total assets
    • times interest earned
    • fixed charge coverage
  5. du pont system of analysis
    return on total assets through rofit margin and asset turnover
  6. recievables turnover
    Sales (credit) / recievables
  7. inventory turnover
    sales / inventory
  8. fixed asset turnover
    sales / fixed assets
  9. total assets turnover
    sales / total assets
  10. average collection period
    accounts recievable / average daily credit sales
  11. current ratio
    current assets / current liabilities
  12. quick ratio
    current assets - inventory / current liabilities
  13. debt to total assets
    total debt / total assets
  14. times interest earned
    income before interest and taxes / interest
  15. fixed charge coverage
    income before fixed charges and coverage / fixed charges
Card Set
Financial Ratios