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FS Analysis Formulas

This document defines and provides the formulas for 23 common financial ratios used to analyze the financial performance and position of a business. These ratios can be used to evaluate metrics like profitability, liquidity, leverage, valuation, and operating efficiency. The ratios are calculated by taking key figures from a company's income statement, balance sheet, and statement of cash flows and relating them using simple mathematical formulas.

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Czarhiena Santiago
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46 views3 pages

FS Analysis Formulas

This document defines and provides the formulas for 23 common financial ratios used to analyze the financial performance and position of a business. These ratios can be used to evaluate metrics like profitability, liquidity, leverage, valuation, and operating efficiency. The ratios are calculated by taking key figures from a company's income statement, balance sheet, and statement of cash flows and relating them using simple mathematical formulas.

Uploaded by

Czarhiena Santiago
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

a.

     Earnings per share of common stock Profit - Preferred Dividends


=
Weighted Average Common Share

b.     Price-earnings ratio Market price per share of stock


=
Earnings per share

c.     Dividend payout ratio Dividend per share


=
Earnings per share

d.     Dividend yield ratio Dividend per share


=
Market price per share

e.     Return on total sales Net Income


=
Average Assets

f.     Return on common stockholder's equity Net Income - Preferred Dividends


= Average common stockholder's
Equity

Stockholder's Equity - Preferred


g.     Book value per share = Stock
Average Shares Outstanding

h.      Working capital


= Current Assets - Current Liabilities

i.     Current ratio Current Asset


=
Current Liabilities

j.      Acid-test ratio. Current Asset - Inventory-PE


=
Current Liabilities

k. Debt to Total Assets Ratio = Total Liabilities/Total Assets


l.     Accounts receivable turnover Net Credit Sales
=
Average Trade Receivables

m.      Average collection period 365 days


=
Receivable turnover ratio

n.      Inventory turnover Cost of Goods Sold


=
Average Inventory

o.     Average sale period/Number of Days in


Inventory = 365 days
Inventory Turnover

p.      Times interest earned Earnings Interest and Taxes


=
Interest Expense

q.      Debt-to-equity ratio Total Liabilities


=
Shareholder's Equity

r.     Return on Sales or Profit Margin Profit


=
Net Sales

s.    Return on Equity Profit


=
Average Owner’s Equity

t.     Payout ratio Cash Dividend


=
Profit

u.     Asset Turnover Ratio Net Sales


=
Average Total Assets

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