FNAN 307 S.G. Exam 1: 2/2

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hluquette
ID:
7806
Filename:
FNAN 307 S.G. Exam 1: 2/2
Updated:
2010-02-23 01:13:34
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FNAN 307 MFox Ratios
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Description:
FNAN 307: SPR 10
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  1. quick ratio
    CA/CL

    Measures ability to meet current debts with current assets.

    #

    Liquidity
  2. Quick Ratio (Acid-Test)
    CA-inv/CL

    Measures ability tomeet current debts with most-liquid (quick) current assets.

    #

    Liquidity
  3. Debt - to - equity
    total debt/shareholders' equity(total equity)

    indicates the extent to which debt financing is used relative to equity financing.

    %

    Leverage
  4. debt-to-total assets (debt ratio)
    total debt/total assets

    Shows the relative extent to which the firm is using borrowed money.

    %

    Leverage
  5. Interest Coverage
    EBIT/ interest expense

    indicates ability to cover interest charges; tells number of times interest is earned.

    #

    Leverage
  6. Receiveable Turnover (RT)
    annual net credit sales/receivables

    Measures how many times the receivables have been turned over (into cash) during the year; provides insight into quality of the receivables.

    #

    Activity
  7. receivable turnover in days (RTD)
    365/RT

    Average number of days receivables are outstanding before being collected

    #

    Activity
  8. Inventory Turnover (IT)
    COGS/inventory

    Measures how many times the inventory has been turned over(sold) during the yr; provides insight into liquidity of inventory and tendency to overstock.

    #

    Activity
  9. Inventory Turnover in Days (ITD)
    365/IT

    Average number of days the inventory is held before it is turned into accounts receivable through sales.

    #

    Activity
  10. Total Asset Turnover (Capital Turnover)
    Sales/total assets

    Measures the relative efficiency of total assets to generate sales.

    #

    Activity
  11. Net Profit Margin (Return on Sales)
    Net Profit after Tax/ sales

    Measures profitability with respect to sales generated; net income per dollar of sales.

    %

    profitability
  12. Return on Investment (ROI) (return on assets)
    net profit after taxes/total assets {=Net profit margin/total asset turnover}

    Measures overall effectiveness in generating profits with available assets; earning power of invested capital

    Profitability
  13. Return on Equity (ROE)
    net profit after taxes/ shareholders' equity

    Measures earning power on shareholders' book-value investment (eat/common equity)

    Profitability
  14. equity multiplier
    1+(debt/equity)
  15. P/E ratio
    price per share/earnings for share

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