 |
Financial Ratios |
|
| U.S. GAAP | IFRS, IAS | Accounting Topics |
Accounting Ratios
for Financial Statement Analysis
| Liquidity Analysis Ratios |
Current Ratio |
| Current Assets | ||
| Current Ratio = | ------------------------ | |
| Current Liabilities | ||
|
Quick
Ratio |
| Quick Assets | ||
| Quick Ratio = | ---------------------- | |
| Current Liabilities | ||
| Quick Assets = Current Assets - Inventories |
|
Net Working Capital
Ratio |
| Net Working Capital | ||
| Net Working Capital Ratio = | -------------------------- | |
| Total Assets | ||
| Net Working Capital = Current Assets - Current Liabilities |
| Profitability Analysis Ratios |
|
Return
on Assets (ROA) |
| Net Income | ||
| Return on Assets (ROA) = | ---------------------------------- | |
| Average Total Assets | ||
| Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2 |
|
Return on Equity (ROE)
|
| Net Income | ||
| Return on Equity (ROE) = | -------------------------------------------- | |
| Average Stockholders' Equity | ||
| Average
Stockholders' Equity = (Beginning Stockholders' Equity + Ending Stockholders' Equity) / 2 |
|
Return on Common Equity (ROCE)
|
| Net Income | ||
| Return on Common Equity (ROCE) = | -------------------------------------------- | |
| Average Common Stockholders' Equity | ||
| Average Common Stockholders' Equity = (Beginning Common Stockholders' Equity + Ending Common Stockholders' Equity) / 2 |
|
Profit Margin
|
| Net Income | ||
| Profit Margin = | ----------------- | |
| Sales | ||
|
Earnings Per
Share (EPS)
|
| Net Income | ||
| Earnings Per Share (EPS) = | --------------------------------------------- | |
| Number of Common Shares Outstanding | ||
| Activity Analysis Ratios |
|
Assets
Turnover Ratio |
| Sales | ||
| Assets Turnover Ratio = | ---------------------------- | |
| Average Total Assets | ||
| Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2 |
|
Accounts
Receivable Turnover Ratio |
| Sales | ||
| Accounts Receivable Turnover Ratio = | ----------------------------------- | |
| Average Accounts Receivable | ||
| Average Accounts
Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2 |
|
Inventory
Turnover Ratio
|
| Cost of Goods Sold | ||
| Inventory Turnover Ratio = | --------------------------- | |
| Average Inventories | ||
| Average Inventories = (Beginning Inventories + Ending Inventories) / 2 |
| Capital Structure Analysis Ratios |
|
Debt
to Equity Ratio |
| Total Liabilities | ||
| Debt to Equity Ratio = | ---------------------------------- | |
| Total Stockholders' Equity | ||
|
Interest Coverage Ratio |
| Income Before Interest and Income Tax Expenses | ||
| Interest Coverage Ratio = | ------------------------------------------------------- | |
| Interest Expense | ||
| Income Before
Interest and Income Tax Expenses = Income Before Income Taxes + Interest Expense |
| Capital Market Analysis Ratios |
|
Price Earnings (PE) Ratio |
| Market Price of Common Stock Per Share | ||
| Price Earnings (PE) Ratio = | ------------------------------------------------------ | |
| Earnings Per Share | ||
|
Market to Book Ratio |
| Market Price of Common Stock Per Share | ||
| Market to Book Ratio = | ------------------------------------------------------- | |
| Book Value of Equity Per Common Share | ||
| Book Value of
Equity Per Common Share = Book Value of Equity for Common Stock / Number of Common Shares |
|
Dividend Yield |
| Annual Dividends Per Common Share | ||
| Dividend Yield = | ------------------------------------------------ | |
| Market Price of Common Stock Per Share | ||
| Book Value of
Equity Per Common Share = Book Value of Equity for Common Stock / Number of Common Shares |
|
Dividend Payout Ratio |
| Cash Dividends | ||
| Dividend Payout Ratio = | -------------------- | |
| Net Income | ||
| ROA = Profit Margin X Assets Turnover Ratio |
|
ROA = Profit Margin X Assets
Turnover Ratio |
| Net Income | Net Income | Sales | ||
| ROA = | ------------------------ = | -------------- X | ------------------------ | |
| Average Total Assets | Sales | Average Total Assets | ||
| Profit Margin =
Net Income / Sales Assets Turnover Ratio = Sales / Averages Total Assets |
