financial ratios cheat sheet, Cheat Sheet of Finance

Download financial ratios cheat sheet and more Cheat Sheet Finance in PDF only on Docsity! analystprep.com Liquidity ratios measure the company’s ability to meet its short-term obligations and how quickly assets are converted into cash. The following table explains how to calculate the major liquidity ratios. Liquidity Ratios Profitability ratios measure the company’s ability to generate profits from its resources (assets). The table below shows the calculations of these ratios. Profitability Ratios Solvency ratios measure a company’s ability to meet long-term obligations. Subsets of these ratios are also known as “leverage” and “long-term debt” ratios. Solvency Ratios Valuation ratios measure the quantity of an asset or flow (i.e., earnings) associated with ownership of a specified claim (i.e., a share or ownership of the enterprise). The following tables show the most of the common valuation ratios. Valuation Ratios Inventory turnover Days of inventory on hands (DOH) Receivables turnover Revenue or Revenue from credit sales Average receivables Number of days Receivable turnover Purchases Average payables Number of days in a period Payable turnover Revenue Average working capital Revenue Average fixed assets Revenue Average total assets Days of sales outstanding (DSO) Payable Turnover Number of days of payables Working capital turnover Fixed assets turnover Total assets turnover Activity Ratios Ratio calculation Activity ratios measure how efficiently a company performs day-to-day tasks, such as the collection of receivables and management of inventory. The table below clarifies how to calculate most of the activity ratios. Activity Ratios Total debt Total shareholders’ equity Average total assets Total shareholders’ equity Debt-to-assets Dept-to-capital Dept-to-equity Financial leverage Solvency ratios Ratio calculation EBT (Earnings Before Taxes) Revenue Net income Revenue Gross profit margin Operating margin Pretax margin Net profit margin Return on sales ratios Ratio calculation EBIT Debt + Equity Net income Average total equity Net income - Preferred dividends Average common equity Opearting ROA ROA Return on total capital ROE Return on common equity Return on investment ratios Ratio calculation Interest coverage Fixed charge coverage Coverage Ratios Ratio calculation Cash + Short term marketable securities Current liabilities Cash + Short term marketable securities + Receivables Daily expenditures DOH + DSO - Number of days of payables Current Quick Cash Defensive interval Cash conversion cycle Liquidity ratios Ratio calculation Page 1 CFA Level 1 Financial Ratios Sheet Cost of goods sold Average inventory Number of days in period Inventory turnover Current assets Current liabilities Cash + Short term marketable securities + Receivables Current liabilities Total debt Total assets Total debt Total debt + Total shareholders’ equity Gross profit Revenue Operating profit Revenue Operating income Average total assets Net income Average total assets EBIT Interest payements EBIT + Lease payements Interest payements + Lease payements analystprep.com Solvency ratios measure a company’s ability to meet long-term obligations. Subsets of these ratios are also known as “leverage” and “long-term debt” ratios. Solvency Ratios Segment ratios are important for segment reporting. Remember that a company doesn’t have to disclose information about all of its segments; they only need to be disclosed if that segment constitutes 10 percent or more of the combined operating segments' revenue, assets, or profit. If the revenue of the reported segments is less than 75% of the revenue of the entire company, more segments must be reported until the 75% level is reached. Segment Ratios Leverage ratios measure the extent to which a company uses liabilities rather than equity to finance its assets Leverage Ratios Price per share Sales per share Price per share Book value per share P/E PC/F P/S P/BV Valuation ratios Ratio calculation Total debt Total equity Average total assets Average equity Debt-to-assets ratio Debt is defined as the sum of interest-bearing short-term and long-term debt.| A A A A Debt-to-capital ratio Debt-to-equity ratio Financial leverage ratio Leverage Ratios Segment margin Segment turnover Segment ROA Segmentt debt ratio Segment ratio Segment profit (loss) Segment revenue Segment profit (loss) Segment liabilities Numerator Segment revenue Segment assets Segment assets Segment assets Denominator Measures a segment’s profitability relartive to its revenues Measures a segment’s ability to generate revenue using assets Measures a segment’s operating profitability relative its assets Measures a segment solvency Indication CFO - Capital expenditures - Dividend paid Total debt FFO - Dividends Capital expenditures FFO (Funds from operations) to debt Free operating cash flow-to-debt Discretionary cash flow-to-debt Net cash flow-to-capital expenditures b x ROE Dividend payout ratio Retention rate (b) Sustainable growth rate Dividend - related ratios Ratio calculation CFO - Preferred dividends Weighted average number of ordinary shares outstanding EBITDA Average number of common stock Dividends paid Number of shares outstanding Basic EPS Diluted EPS Cash flow per share EBITDA per share Dividends per share Price per share Ratio calculation EBIT interest coverage Price per share Ratio calculation EBITDA interest coverage FFO (funds from operations) interest coverage Price per share Ratio calculation Return on capital Page 2 CFA Level 1 Financial Ratios Sheet Price per share Earnings per share Price per share Cash flow per share Total debt Total assets Total debt Total debt + Total equity FFO Total debt CFO (adjusted) - Capital expenditures Total debt Common share dividends Net income attributable to common shares Net income attributable to common shares - Common share dividends Net income attributable to common shares Net income - Preferred dividends Weighted average number of ordinary shares outstanding Net income - Preferred dividends + Aftertax interest on ordinary shares outstanding Weighted average number of ordinary shares outstanding + Number of common shares that would have been issued at conversion EBIT Gross interest (prior to deductions for capitalized interest or interest income) EBITDA Gross interest (prior to deductions for capitalized interest or interest income) FFO + Interest paid - Operatinf lease adjustments Gross interest (prior to deductions for capitalized interest or interest income) EBIT Average capital where Capital = Equity + Non-current deffered taxes + Debt