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Ratios+ +summary

The document outlines various financial ratios used to assess a company's liquidity, efficiency, profitability, and leverage. Key ratios include the current ratio, quick ratio, debt ratio, and return on equity, among others. Additionally, it provides formulas for calculating turnover ratios and the cash conversion cycle.

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Chido Maphosa
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17 views2 pages

Ratios+ +summary

The document outlines various financial ratios used to assess a company's liquidity, efficiency, profitability, and leverage. Key ratios include the current ratio, quick ratio, debt ratio, and return on equity, among others. Additionally, it provides formulas for calculating turnover ratios and the cash conversion cycle.

Uploaded by

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

Current ratio =
Current liabilities

Current assets - inventory


Quick ratio (acid-test ratio) =
Current liabilities

Sales
Non-current asset turnover =
Non-current assets

Cost of sales
Inventory (INV) turnover =
Inventory

Sales
Asset (Operating Asset) turnover =
Operating asset

Debt
Debt ratio =
Total assets

Debts to equity = Total debt


Total equity

EBIT
Times interest earned coverage =
Interest

EBIT + Dep. +Amortisation


EBITDA coverage =
Interest

Gross profit
Gross profit margin =
Sales

EBIT
Net operating profit margin =
Sales

Net profit
Net profit margin =
Sales

Net profit
Return on assets (ROA) =
Total assets

Net profit
Return on equity (ROE) =
Total shareholders equity

Cash flow from operations


Cash flow to debt =
Total debt

Dividends per share


Dividends yield =
Price per share
Earnings per share
Earnings yield =
Price per share

Price per share


Price earnings ratio =
Earnings per share

Earnings per share


Dividend cover =
Dividend per share

Credit Sales
Accounts receivables turnover =
Average trade receivables

Accounts payables turnover = Purchases


Average trade payables

Average Inventory x 365


Average inventory days =
Cost of sales

Average Accounts receivable x 365


Average collection days =
Sales (use credit sales if available)

Average Trade payables x 365


Average payable days =
Purchases (use credit purchases if available)

Cash conversion cycle (CCC) Days Inventory + Days Debtors - Days Payables

Financial leverage ratio Total assets


Total equity

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