ACCOUNTING RATIOS

g SUMMARY

Open a new spreadsheet, and follow the structure hare afer. For each year, one column, and for each row one accounting item, concept, total, sub-total, ratio, etc ...


g REMINDER

1) LIQUIDITY ANALYSIS RATIOS
= Current Ratio = Current Assets / Current Liabilities
= Quick Ratio = Quick Assets / Current Liabilities
= Net Working Capital Ratio = Net Working Capital / Total Assets

2) PROFITABILITY ANALYSIS RATIOS
= Retrun on Assets = Net Income / Average Total Assets
= Return on Equity (ROE) = Net Income / Average Stockholders' Equity
= Return on Common Equity (ROCE) = Net Income / Average Common Stockholders' Equity
= Profit Margin = Net Income / Sales
= Earnings Per Share (EPS) = Net Income / Number of Common Shares Outstanding

3) ACTIVITY ANALYSIS RATIOS
= Assets Turnover Ratio = Sales / Average Total Assets
= Accounts Receivable Turnover Ratio = Sales / Average Accounts Receivable
= Inventory Turnover Ratio = Cost of Goods Sold / Average Inventories

4) CAPITAL STRUCUTRE ANAÑYLIS RATIO
= Debt to Equity Ratio = Total Liabilities / Total Stockholders' Equity
= Interest Coverage Ratio = Income Before Interest and Income Tax Expenses / Interest Expenses

5) CAPITAL MARKET ANALYSIS RATIOS
= Price Earnings (PE) Ratio = Market Price of Common Stock Per Share /Earnings Per Share
= Market to Book Ratio = Market Price of Common Stock Per Share / Book Value of Equity Per Common Share
= Dividend Yield = Annual Dividends Per Common Share/Market Price of Common Stock Per Share
= Dividend Payout Ratio = Cash Dividends / Net Income

6) ROA
= ROA = Net Income/ Average Total Assets
= ROA = (Net Income / Sales) x (Sales / Average Total Assets)


g OTHER DEFINITIONS AND RELATIONS
= Quick Assets
= Current Assets - Inventories
= Net Working Capital
= Current Assets - Current Liabilities
= Average Total Assets
= (Beginning Total Assets + Ending Total Assets)/2
= Average Stockholders' Equity
= (Beginning Stockholders' Eq. + End. Stockholders' Eq.)/ 2
= Average Common Stockholders' Equity
= (Beginning Common Stockholders' Equity + Ending Common Stockholders' Equity) / 2
= Average Total Assets
= (Beginning Total Assets + Ending Total Assets) / 2
= Average Accounts Receivable
= (Beginning Accounts Receivable + Ending Accounts Receivable) / 2
= Average Inventories
= (Beginning Inventories + Ending Inventories) / 2
= Income Before Interest and Income Tax Expenses
= Income Before Income Taxes + Interest Expense
= Book Value of Equity Per Common Share
= Book Value of Equity for Common Stock / Number of Common Shares
= Book Value of Equity Per Common Share
= Book Value of Equity for Common Stock / Number of Common Shares
= Profit Margin
= Net Income / Sales Assets Turnover Ratio
= Sales / Averages Total Assets