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FINANCIAL STATEMENT ANALYSIS, This is how much Investors are willing to…
FINANCIAL STATEMENT ANALYSIS
LIQUIDITY RATIOS
Current ratio = CA/CL
Acid Test Ratio = (CA-Inventory)/CL
PROFITABILITY RATIOS
Net Profit Margin = Net Profit/Sales
ROA = EBIAT/Total Asset
Profit Margin = EBIT/Sales
RONetA = EBIAT/(Total Asset - CL)
GP Margin = GP/Sales
ROE = Net Profit/Equity
ASSET MANAGEMENT RATIOS
Inventory Turnover = COS/Inventory
Average Collection Period = Debtors/(Credit Sales/365)
Fixed Asset Turnover = Sales/ Fixed Assets
Total Asset Turnover = Sales/Total Assets
CASH FLOW RATIOS
Earnings Yield = EPS/ Market Price per share
Dividend Yield = Dividend Per share / Market Price per share
Cash Flow to Total Debt
Price Earnings Ratio = Market Price per share/ EPS
Dividend Cover = EPS / Dividend Per Share
DEBT MANAGEMENT RATIOS
Debt Ratio = Total Debt / Total Assets
Times Interest Earned = EBIT / Interest
Debt Equity Ratio = Total Debt/ Equity
This is how much Investors are willing to pay for shares