Finance Formulas

(1 + nominal risk-free rate)l risk-free rate)

(1 + real rate) (1 + rate of inflation)

current ratio

current assets/current liabilities

quick or acid test ratio

 (current assets – inventory)/current liabilities

days in receivables

accounts receivable/daily credit sales

accounts receivable turnover

credit sales/accounts receivable

days in inventory

inventory/daily cost of goods sold

inventory turnover

cost of goods sold/inventory

operating return on as sets

operating profit/total assets

operating profit margin

operating profit/sales

total asset turnover

sales/total assets

fixed asset turnover

sales/fixed assets

debt ratio

total debt/total assets

times interest earned

operating income/interest

return on equity

net income/common equity

price/earnings ratio

market price per share/earnings per share

price/book ratio

market price per share/equity book value per share

EVA

operating return on assets - cost of capital) x (total assets)