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    MAS Financial-Ratios

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    Julius Lester Abiera
    This document defines and provides formulas for various types of financial ratios used in ratio analysis, including liquidity, efficiency, leverage, performance, market prospect, and other ratios. It lists key ratios such as the current ratio, quick ratio, receivables turnover, inventory turnover, debt-to-equity ratio, return on assets, earnings per share, price-earnings ratio, and dividend yield. The ratios measure aspects of working capital management, asset use, debt levels, profitability, and stock market performance.

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    MAS Financial-Ratios

    Uploaded by

    Julius Lester Abiera
    250 views4 pages
    This document defines and provides formulas for various types of financial ratios used in ratio analysis, including liquidity, efficiency, leverage, performance, market prospect, and other ratios. It lists key ratios such as the current ratio, quick ratio, receivables turnover, inventory turnover, debt-to-equity ratio, return on assets, earnings per share, price-earnings ratio, and dividend yield. The ratios measure aspects of working capital management, asset use, debt levels, profitability, and stock market performance.

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    This document defines and provides formulas for various types of financial ratios used in ratio analysis, including liquidity, efficiency, leverage, performance, market prospect, and other ratios. It lists key ratios such as the current ratio, quick ratio, receivables turnover, inventory turnover, debt-to-equity ratio, return on assets, earnings per share, price-earnings ratio, and dividend yield. The ratios measure aspects of working capital management, asset use, debt levels, profitability, and stock market performance.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    250 views4 pages

    MAS Financial-Ratios

    Uploaded by

    Julius Lester Abiera
    This document defines and provides formulas for various types of financial ratios used in ratio analysis, including liquidity, efficiency, leverage, performance, market prospect, and other ratios. It lists key ratios such as the current ratio, quick ratio, receivables turnover, inventory turnover, debt-to-equity ratio, return on assets, earnings per share, price-earnings ratio, and dividend yield. The ratios measure aspects of working capital management, asset use, debt levels, profitability, and stock market performance.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    At a glance
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    The document discusses various financial ratios used to analyze a company's performance and financial health including liquidity, efficiency, leverage and market prospect ratios.

    Some common liquidity ratios discussed are current ratio, quick ratio, cash ratio and net working capital ratio.

    Some common efficiency ratios discussed are inventory turnover, receivables turnover, payables turnover, fixed asset turnover and asset turnover.

    SUMMARY OF FORMULA FOR RATIO ANALYSIS

    LIQUIDITY RATIOS

    Current Assets
    CURRENT RATIO =
    Current Liabilities

    Quick Assets*
    QUICK RATIO =
    Current Liabilities

    *Quick assets = cash + receivables + marketable securities

    Quick Assets
    DEFENSIVE INTERVAL =
    Average Daily Expenditures

    Cash + Marketable Securities


    CASH RATIO =
    Current Liabilities

    NET WORKING CAPITAL = Current Assets less Current Liabilities

    OPERATING CYCLE = Collection Period plus Inventory Period

    CASH CONVERSION CYCLE = Operating Cycle less Deferral Period

    EFFICIENCY RATIOS

    Credit Sales
    RECEIVABLE TURNOVER =
    Average Trade Receivables

    INVENTORY TURNOVER* = Cost of Goods Sold


    (Merchandiser) Average Inventory

    INVENTORY TURNOVER* = FG Turnover + WIP Turnover + RM Turnover


    (Manufacturer)

    Cost of Goods Sold


    FINISHED GOODS TURNOVER =
    Average FG Inventory

    Cost of Goods Manufactured


    WORK IN PROCESS TURNOVER =
    Average WIP Inventory

    Raw Materials Used


    RAW MATERIALS TURNOVER =
    Average RM Inventory

    Credit Purchases
    PAYABLE TURNOVER =
    Average Trade Payable

    Revenue
    ASSET TURNOVER =
    Average Total Assets

    Revenue
    FIXED ASSET TURNOVER =
    Average Fixed Assets
    Revenue
    WORKING CAPITAL TURNOVER =
    Average Working Capital

    COLLECTION PERIOD = 365 or 360


    (Days sales outstanding) Receivable Turnover

    OR

    COLLECTION PERIOD = Average Receivable


    (Days sales outstanding) Average Daily Credit Sales

    INVENTORY PERIOD = 365 or 360


    (Days of inventory outstanding) Inventory Turnover

    OR

    INVENTORY PERIOD = Average Inventory


    (Days of inventory outstanding) Average Daily Cost of Goods Sold

    PAYABLE PERIOD = 365 or 360


    (Deferral Period) Payable Turnover

    OR

    PAYABLE PERIOD = Average Payable


    (Deferral Period) Average Daily Credit Purchases

    LEVERAGE RATIOS

    Total Liabilities
    DEBT-TO-EQUITY
    Total Equity

    Total Liabilities
    DEBT RATIO
    Total Assets

    Total Equity
    EQUITY RATIO
    Total Assets

    EQUITY MULTIPLIER = 1
    (Financial Leverage Ratio) Equity Ratio

    EQUITY MULTIPLIER = Average Total Assets


    (Financial Leverage Ratio) Average Total Equity

    INTEREST COVERAGE RATIO = EBIT


    (Times Interest Earned) Interest Payments

    DEGREE OF FINANCIAL LEVERAGE = EBIT


    (Financial Leverage Factor) EBIT - Interest Payments
    PERFORMANCE RATIOS

    Profit
    PROFIT MARGIN =
    Revenue

    Gross Income
    GROSS PROFIT MARGIN =
    Revenue

    Operating Income
    OPERATING PROFIT MARGIN =
    Revenue

    Profit
    RETURN ON SALES =
    Sales

    RETURN ON ASSET = Profit


    (General Formula) Average Total Assets

    RETURN ON ASSET =
    Return on Sales (ROS) X Asset Turnover (ATO)
    (Du Pont Model)

    RETURN ON EQUITY = Profit


    (General Formula) Average Total Equity

    RETURN ON EQUITY =
    ROS X ATO X EQUITY MULTIPLIER
    (Du Pont Model)

    FREE CASH FLOW (FIRM) = Operating CF + After Tax Interest - Capital Expenditures

    FREE CASH FLOW (EQUITY) = Operating CF - Capital Expenditures + Net Borrowing

    MARKET PROSPECT RATIOS

    Net Income to Ordinary Stockholders


    EARNINGS PER SHARES (EPS) =
    No. of Outstanding Ordinary Shares

    Dividend per Share (DPS)


    Dividend Yield =
    Market Value per Share (MVPS)

    MVPS
    Price Earnings Ratio (P/E) =
    EPS

    DPS
    Dividend Payout =
    EPS

    Dividends Declared
    Dividend Payout =
    Net Income

    Retention/Plowback Ratio = 100% less Payout Ratio


    OTHER RATIOS

    Average Total Assets


    CAPITAL INTENSITY RATIO
    Sales

    EBITDA
    DEBT SERVICE COVERAGE RATIO
    Interest Plus Principal Repayment

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