Cheatography

# Common Financial & Accounting Ratios & Formulas Cheat Sheet (DRAFT) by [deleted]

This is a draft cheat sheet. It is a work in progress and is not finished yet.

### Introd­uction

 Accounting ratios are widely used tools of financial analysis. If properly analyzed, they help identify areas on the financial statement needing further analysis. A ratio is a mathem­atical relation between two quantities expressed as a percen­tage, a rate or propor­tion.

### Short Term Solvency or Liquidity Ratios

 Current Ratio = Current Assets / Current Liabil­ities Quick Ratio = (Current Assets – Inventory) / Current Liabil­ities Cash Ratio = Cash / Current Liabil­ities Net Working Capital = Net Working Capital / Total Assets Internal Measure = Current Assets / Average Daily Operating Costs Percentage of Debt to Asset Formula = Long Term Liabil­ities ⁄ Total Assets x 100% Debt to Equity Ratio Formula = Total Liabil­ities ⁄ Total Equity

### Long Term Solvency or Financial Leverage Ratios

 Total Debt Ratio = (Total Assets – Total Equity) / Total Assets Debt to Equity Ratio = Total Debt / Total Equity Equity Multiplier = Total Assets / Total Equity Long Term Debt Ratio = Long Term Debt / (Long Term Debt + Total Equity) Times Interest Earned = Earnings before Interest & Taxes / Interest Cash Coverage Ratio = (Earnings before Interest & Taxes + Deprec­iation) / Interest

### Asset Use or Turnover Ratios

 Inventory Turnover = Cost of Goods Sold / Inventory Days’ Sales in Inventory = 365 days / Inventory Turnover Receiv­ables Turnover = Sales / Accounts Receivable Days’ Sales in Receiv­ables = 365 days / Receiv­ables Turnover Net Working Capital (NWC) Turnover = Sales / Net Working Capital Fixed Asset Turnover = Sales / Net Fixed Assets Total Asset Turnover = Sales / Total Assets

### Profit­ability Ratios

 Profit Margin = Net Income / Sales Return on Assets (ROA) = Net Income / Total Assets Return on Equity (ROE) = Net Income / Total Equity ROE = (Net Income / Sales) x (Sales / Assets) x (Assets / Equity)

### Market Value Ratios

 Price to Earnings Ratio = Price per Share / Earnings per Share Market­-to­-Book Ratio = Market Value per Share / Book Value per Share

### Cash Flow Ratios

 Cash Flow Solvency Ratio Formula = Actual Cash Flow from Operations ⁄ Total Liabil­ities Cash Flow Margin Ratio Formula = Actual Cash Flow from Operations ⁄ Revenues from Sales Cash flow ROA Ratio Formula = Actual Cash Flow from Operations ⁄ Average Total Assets