Financial ratios:

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PERFORMANCE MEASURES
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PERFORMANCE MEASURES
Market value added ($ millions)
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market value of equity - book value of equity
Market-to-book ratio
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market value of equity / book value of equity
Price/Earnings (P/E) ratio
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market price per share / earnings per share
EVA ($ millions)
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(after-tax interest + net income) – (cost of capital x total capital)
Return on capital (ROC)
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(after-tax interest + net income) / total capital
Return on equity (ROE)
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net income / equity
Return on assets (ROA)
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(after-tax interest + net income) / total assets 1.
Return on assets (ROA)
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net income / total assets
EFFICIENCY MEASURES
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EFFICIENCY MEASURES
Asset turnover
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sales / total assets
Fixed asset turnover
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sales / fixed assets
Inventory turnover
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cost of goods sold / inventory
Days in inventory
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inventory / daily cost of goods sold
Receivables turnover
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sales / receivables
Average collection period (days)
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receivables / daily sales
(Net) Profit margin
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net income / sales
Operating profit margin
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(after-tax interest + net income) / sales
Operating profit margin 2
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EBIT // sales
LEVERAGE MEASURES
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LEVERAGE MEASURES
Long-term debt ratio
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long-term debt / total capital
Long-term debt-equity ratio
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long-term debt / equity
(Total) debt ratio
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total liabilities / total assets
Times interest earned
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EBIT / interest payments
Cash coverage ratio
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(EBIT + depreciation) / interest payments
Leverage ratio
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total assets / equity
LIQUIDITY MEASURES
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LIQUIDITY MEASURES
Net-working-capital-to-total-assets
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(current assets – current liabilities) / total assets
Current ratio
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current assets / current liabilities
Quick ratio
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(cash + marketable securities + receivables) / current liabilities
Quick ratio
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(current assets-inventory) / current liabilities
Cash ratio
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(cash + marketable securities) / current liabilities

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