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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