Ratio Name |
Quick Description |
Formula |
Quick Report |
| Accounts receivable turnover |
Measures ability to convert accounts
receivables (or credit sales) into cash |
Accounts receivable turnover = (net
credit sales / average net accounts receivable) |
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| Age of accounts receivable |
Measures ability to convert accounts
receivables (or credit sales) into cash |
Age of accounts receivable = 365 days
/ accounts receivable turnover |
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| Asset efficiency |
Measures ability to generate revenue
from assets |
N= per dollar of assets Asset Efficiency
= (Revenues / Total Assets) x N |
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| Asset turnover |
Measures ability to generate revenue
from assets - expansion to include all
assets |
Asset turnover = Net sales revenue /
average total assets |
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| Earnings retention ratio |
Calculates what the percentage of earnings
are returned to shareholders |
Earnings retention ratio = ((earnings
per share - dividend per share) / earnings
per share)* 100% |
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| Inventory turnover |
A ratio between the cost of goods sold
and the average inventory balance |
Inventory turnover = cost of goods sold
/ average inventory |
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| Net Cash Flow to Current Liabilities |
Measurement of a company's ability to
cover current liabilities |
Net cash flow to current liabilities
= net cash flow from operations / current
liabilities |
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| Revenue efficiency |
Measurement of how much revenue does
a company need to take in to produce how
much net earnings |
N= per dollars of revenue Revenue Efficiency
= (Net earnings / Revenue) x N |
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| Working capital turnover |
measurement of managements ability to
use working capital to generate revenue |
Working capital turnover = Net sales
revenue / average working capital |
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Ratio
Name |
Quick
Description |
Formula |
Quick
Report |
| Acid test ratio (quick ratio) |
The acid test ratio (or
quick ratio) is a measurement of a company's
ability to pay short term liabilities
without selling inventory. |
Acid test ratio = (Accounts
receivable + Cash equivalents + Cash)
/ Current liabilities |
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| Cash Asset Ratio or Cash
Ratio |
Measures the corporations
ability to quickly liquidate assets and
cover short-term liabilities. |
Cash ratio = (Cash equivalents
+ Cash) / Current liabilities |
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| Current ratio |
Measurement of a company's
ability to pay short term liabilities. |
Current ratio = (inventory
+ accounts receivable + cash equivalents)
/ Current liabilities |
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| Defensive-Interval ratio |
Measurement of how long
a company can operate using only current
liquid assets. |
Defensive-interval ratio
= Current liquid assets (quick assets)
/ Projected daily operational expenditures |
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Ratio
Name |
Quick
Description |
Formula |
Quick
Report |
| Book value per share |
The idea behind book value
per share is that if a company's calculated
book value per share is higher than the
current stock price, the company is undervalued
(or vice versa) |
To calculated book value
per preferred share: (Share capital
of preferred and common stock + contributed
surplus + retained earnings) / number
of preferred shares outstanding.
To calculate book value per common
share: (share capital of common stock
+ contributed surplus + retained earnings)
/ number of common shares outstanding |
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| Debt to equity ratio |
The two most basic sources
of funds for a company are debt and equity.
Debt and equity both have unique characteristics
and the relationship between these two
sources is widely used to evaluate the
financial strength of a business. |
Debt to equity = Total liabilities
/ Owner's equity |
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| EPS rank |
EPS rank (earnings per share
rank) is a measurement of a company's
EPS growth (and stability of that growth)
over the last five years. |
To calculate the EPS rank
of a company, take the percent change
in the last two quarters earnings, versus
the same quarters of the previous year,
combine and average with the 5 year data. |
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| Price to book ratio (P/B) |
This is a ratio between
current market price and the companies
book value. |
P/B = Last close / Book
value per share. |
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| Price to cash
flow (P/CF) |
This valuation
focuses on the amount of cash a company
can pay to its shareholders in the form
of a dividend. |
To calculate
price-to-cash-flow ratio, take the stock
price and divide by the last reported
yearly cash flow. |
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| Price to dividend (P/D) |
Price to dividend ratio
is typically used as a general guide to
determine whether an issue is overvalued
or undervalued. A price to dividend ratio
is the reciprocal of dividend yield. |
Dividend ratio = current
market price per share / dividend |
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| Price to earnings (P/E) |
P/E is a ratio of the stocks
price and the stocks earnings per share.
|
To calculate a P/E, take
the price of the stock and divide it by
it's earning per share. |
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| Price to sales ratio (P/S) |
Price to sales ratio is
a less-used type of fundamental valuation
indicator. This valuation focuses on total
revenue. |
To calculate this ratio,
take the stock price and divide by the
last 12 months revenue/share (12 month
revenue per share is calculated by the
last 12 month revenue combined divided
by total number of shares outstanding). |
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| Times interest earned |
Times interest earned is
a ratio which measures the amount of times
interest payments can be covered by income
before taxes. |
Times interest earned =
(Income before taxes + interest) / Interest
charges |
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