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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] |