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MAS Financial-Ratios

This document defines and provides formulas for various types of financial ratios used in ratio analysis, including liquidity, efficiency, leverage, performance, market prospect, and other ratios. It lists key ratios such as the current ratio, quick ratio, receivables turnover, inventory turnover, debt-to-equity ratio, return on assets, earnings per share, price-earnings ratio, and dividend yield. The ratios measure aspects of working capital management, asset use, debt levels, profitability, and stock market performance.

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Julius Lester Abiera
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597 views4 pages

MAS Financial-Ratios

This document defines and provides formulas for various types of financial ratios used in ratio analysis, including liquidity, efficiency, leverage, performance, market prospect, and other ratios. It lists key ratios such as the current ratio, quick ratio, receivables turnover, inventory turnover, debt-to-equity ratio, return on assets, earnings per share, price-earnings ratio, and dividend yield. The ratios measure aspects of working capital management, asset use, debt levels, profitability, and stock market performance.

Uploaded by

Julius Lester Abiera
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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SUMMARY OF FORMULA FOR RATIO ANALYSIS

LIQUIDITY RATIOS

Current Assets
CURRENT RATIO =
Current Liabilities

Quick Assets*
QUICK RATIO =
Current Liabilities

*Quick assets = cash + receivables + marketable securities

Quick Assets
DEFENSIVE INTERVAL =
Average Daily Expenditures

Cash + Marketable Securities


CASH RATIO =
Current Liabilities

NET WORKING CAPITAL = Current Assets less Current Liabilities

OPERATING CYCLE = Collection Period plus Inventory Period

CASH CONVERSION CYCLE = Operating Cycle less Deferral Period

EFFICIENCY RATIOS

Credit Sales
RECEIVABLE TURNOVER =
Average Trade Receivables

INVENTORY TURNOVER* = Cost of Goods Sold


(Merchandiser) Average Inventory

INVENTORY TURNOVER* = FG Turnover + WIP Turnover + RM Turnover


(Manufacturer)

Cost of Goods Sold


FINISHED GOODS TURNOVER =
Average FG Inventory

Cost of Goods Manufactured


WORK IN PROCESS TURNOVER =
Average WIP Inventory

Raw Materials Used


RAW MATERIALS TURNOVER =
Average RM Inventory

Credit Purchases
PAYABLE TURNOVER =
Average Trade Payable

Revenue
ASSET TURNOVER =
Average Total Assets

Revenue
FIXED ASSET TURNOVER =
Average Fixed Assets
Revenue
WORKING CAPITAL TURNOVER =
Average Working Capital

COLLECTION PERIOD = 365 or 360


(Days sales outstanding) Receivable Turnover

OR

COLLECTION PERIOD = Average Receivable


(Days sales outstanding) Average Daily Credit Sales

INVENTORY PERIOD = 365 or 360


(Days of inventory outstanding) Inventory Turnover

OR

INVENTORY PERIOD = Average Inventory


(Days of inventory outstanding) Average Daily Cost of Goods Sold

PAYABLE PERIOD = 365 or 360


(Deferral Period) Payable Turnover

OR

PAYABLE PERIOD = Average Payable


(Deferral Period) Average Daily Credit Purchases

LEVERAGE RATIOS

Total Liabilities
DEBT-TO-EQUITY
Total Equity

Total Liabilities
DEBT RATIO
Total Assets

Total Equity
EQUITY RATIO
Total Assets

EQUITY MULTIPLIER = 1
(Financial Leverage Ratio) Equity Ratio

EQUITY MULTIPLIER = Average Total Assets


(Financial Leverage Ratio) Average Total Equity

INTEREST COVERAGE RATIO = EBIT


(Times Interest Earned) Interest Payments

DEGREE OF FINANCIAL LEVERAGE = EBIT


(Financial Leverage Factor) EBIT - Interest Payments
PERFORMANCE RATIOS

Profit
PROFIT MARGIN =
Revenue

Gross Income
GROSS PROFIT MARGIN =
Revenue

Operating Income
OPERATING PROFIT MARGIN =
Revenue

Profit
RETURN ON SALES =
Sales

RETURN ON ASSET = Profit


(General Formula) Average Total Assets

RETURN ON ASSET =
Return on Sales (ROS) X Asset Turnover (ATO)
(Du Pont Model)

RETURN ON EQUITY = Profit


(General Formula) Average Total Equity

RETURN ON EQUITY =
ROS X ATO X EQUITY MULTIPLIER
(Du Pont Model)

FREE CASH FLOW (FIRM) = Operating CF + After Tax Interest - Capital Expenditures

FREE CASH FLOW (EQUITY) = Operating CF - Capital Expenditures + Net Borrowing

MARKET PROSPECT RATIOS

Net Income to Ordinary Stockholders


EARNINGS PER SHARES (EPS) =
No. of Outstanding Ordinary Shares

Dividend per Share (DPS)


Dividend Yield =
Market Value per Share (MVPS)

MVPS
Price Earnings Ratio (P/E) =
EPS

DPS
Dividend Payout =
EPS

Dividends Declared
Dividend Payout =
Net Income

Retention/Plowback Ratio = 100% less Payout Ratio


OTHER RATIOS

Average Total Assets


CAPITAL INTENSITY RATIO
Sales

EBITDA
DEBT SERVICE COVERAGE RATIO
Interest Plus Principal Repayment

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