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Fin 3322
Corporate Finance Ratio Analysis
Question | Answer |
---|---|
Current ratio | Liquidity ratio: (CA/CL) |
Quick Ratio (acid test) | Liquidity ratio: [(CA-Inventory)/CL] |
Avg Collection period | Asset MGMT: [A Rec/(Credit Sales/365)] |
Inventory Turnover | Asset MGMT: (Cost of Sales/ AVG Inventory) |
Fixed-Asset Turnover | Asset MGMT: ( Sales/ Fixed Assets) |
Total Asset Turnover | Asset MGMT: (Sales/Total Assets) |
Debt Ratio | Financial Leverage MGMT: (Total Debt/Total Assets) |
Debt-to-Equity | Financial Leverage MGMT: (Total Debt/Total Equity) |
Times Interest Earned | Financial Leverage MGMT: (EBIT/ Interest Charges |
Times Fixed Charges Earned | Financial Leverage MGMT: [(EBIT+Lease Pymts)/(Interest+lease pymts+beforetax sinkingfund+pref stock dividend before tax)] |
Gross Profit Margin | Profitability: [(Sales-Cost of Sales)/ Sales] |
Net Profit Margin | Profitability: (EAT/Sales) |
Return on Investment | Profitability: (EAT/ Total Assets) |
Return on Stockholders Equity | Profitability: (EAT/ Stockholders Equity) |
Price-to-Earnings Ratio | Market Based: (Mkt Price per share/current earning per share) |
Market-to-Book | Market Based: (Mkt Price per share/ Book Value per share) |
Payout Ratio | Dividend Policy: (Dividends per share/ Earnings per share) |
Dividend Yield | Dividend Policy: (Expected dividend per share/ Stock Price) |
Fisher Equation | Est the relationship between nominal and real interest rates under inflation. I=R+Inflation |
EAR- Effective Annual rate | if you took $1 and put in the bank and 1 year later you have $1.10. i= annual nominal rate/(time pd). one year holding pd return= (ending value-beg value)/ Begining Value) |
rule of 72 | i=72/# yrs to double...... # yrs to double=72/i |
Holding period returns | return of 1 year= [(end amt-beg amt)+div)/beg amt] |