Financial Ratios

U.S. GAAP Codification IFRS International Standards U.S. Tax Code

Accounting Ratios
for Financial Statement Analysis

U.S. GAAP Codification U.S. Tax Code by Section Securities Law Library
Financial Accounting Intermediate Accounting Advanced Accounting
ASC Accounting Standards IFRS International Standards

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 =
    Average Common Stockholders' Equity
Average Common Stockholders' Equity 
= (Beginning Common Stockholders' Equity + Ending Common Stockholders' Equity) / 2
Profit Margin
    Net Income
Profit Margin =
Earnings Per Share (EPS)
    Net Income
Earnings Per Share =
    Number of Common Shares Outstanding
Activity Analysis Ratios   

Assets Turnover Ratio
Assets Turnover Ratio =
    Average Total Assets
Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2
Accounts Receivable Turnover Ratio
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 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
------------------------  =
--------------  X
Average Total Assets 
Average Total Assets 
Profit Margin = Net Income / Sales 
Assets Turnover Ratio = Sales / Averages Total Assets

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U.S. GAAP by Topic
International Financial Reporting Standards (IFRS)
Accounting Topics
Inventory Valuation Methods
Depreciation Methods
Revenue Recognition Principle
Accrual Basis vs. Cash Basis Accounting
Basics of Journal Entries
Ratios for Financial Statement Analysis
Overview of Financial Statements

Accounting Topics
Generally Accepted Accounting Principles, GAAP
Notes Receivable, Imputation of Interest
Accounting for Inventories
Inventory Valuation Methods: FIFO, LIFO
Inventory Valuation: Lower of Cost or Market
Depreciation Methods: Straight line method, Double-declining balance method
Investments in Debt and Equity Securities
Investments: Equity Method
Derivatives and Hedging, Fair Value Hedge, Cash Flow Hedge, Foreign Currency Hedge
Property, Plant and Equipment
Capitalization of Interest Costs
Accounting for Leases: Operating Lease, Capital Lease
Impairment of Assets
Intangible Assets
Impairment of Goodwill
Contingent Liabilities
Accounting for Bonds Payable
Accounting for Pension and Other Postretirement Benefits
Treasury Stock
Dividend, Stock Dividend, Stock Split
Revenue Recognition, Multiple-Element Revenue Arrangements
Share-based Payment, Stock Compensation
Income Statement
Comprehensive Income
Earnings per Share: Basic EPS, Diluted EPS
Statement of Financial Position, Balance Sheet
Statement of Cash Flows: Operating Activities, Investing Activities, Financing Activities
Financial Statement Analysis, Financial Ratios
Securities and Exchange Commission (SEC) Forms
Present Value, Future Value

Codification Topics at the 100 Level 
Topic 105: Generally Accepted Accounting Principles

Codification Topics at the 200 Level 
Topic 205: Presentation of Financial Statements
Topic 210: Balance Sheet
Topic 215: Statement of Shareholder Equity
Topic 220: Comprehensive Income
Topic 225: Income Statement
Topic 230: Statement of Cash Flows
Topic 235: Notes to Financial Statements
Topic 250: Accounting Changes and Error Corrections
Topic 255: Changing Prices
Topic 260: Earnings per Share
Topic 270: Interim Reporting
Topic 272: Limited Liability Entities
Topic 274: Personal Financial Statements
Topic 275: Risks and Uncertainties
Topic 280: Segment Reporting

Codification Topics at the 300 Level 
Topic 305: Cash and Cash Equivalents
Topic 310: Receivables
Topic 320: Investments-Debt and Equity Securities
Topic 320-10-35: Transfers of Securities: Between Categories
Topic 323: Investments-Equity Method and Joint Ventures
Topic 325: Investments-Other
Topic 330: Inventory
Topic 340: Other Assets and Deferred Costs
Topic 350: Intangibles-Goodwill and Other
Topic 360: Property, Plant, and Equipment

Codification Topics at the 400 Level 
Topic 405: Liabilities
Topic 410: Asset Retirement and Environmental Obligations
Topic 420: Exit or Disposal Cost Obligations
Topic 430: Deferred Revenue
Topic 440: Commitments
Topic 450: Contingencies
Topic 460: Guarantees
Topic 470: Debt
Topic 480: Distinguishing Liabilities from Equity


U.S. GAAP Codification of Accounting Standards
Accounting Standards Codification, ASC, Overview
ASC Codification 100: General Principles
ASC Codification 200: Presentation
ASC Codification 300: Assets
ASC Codification 400: Liabilities
ASC Codification 500: Equity
ASC Codification 600: Revenue
ASC Codification 700: Expenses
ASC Codification 800: Broad Transactions
ASC Codification 900: Industry

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