FAR ratios

gross profit margin

sales(net) - COGS (beg inventory+purchaes-ending inventory) / sales (net)

profit margin

net income / sales (net)

return on sales

EBIT / Sales

Return on assets

Net income / Average total assets

DuPont return on assets

Profit Margin*Asset turnover. OR

(Net income/sales)*(sales/average total assets)

Return on Equity

Net Income / Average total equity

Operating Cash flow ratio

cash flow from operations / Current liabitlies

current ratio

Current assets / Current liabilities

Quick

(Cash+cash equivelants + ST marketable securitues + Receivable(net) / Current Liabitlies

AR turnover

sales (net) / Average AR (net)

• Receivable quality and collecting outstanding receivebale

Days in AR

ending AR / (Sales/365)

Inventory Turnover

COGS / average inventory

• how quickly inventory is sold

Days in inventory

Ending inventory / (COGS/365)

• days required to sell inventory

AP turnover

COGS / Average AP

• how long you take to pay

Days of Payables outstanding

Ending AP / (COGS/365)

• how long payables are outstanding before they are paid

Cash Conversion Cycle

Days sales in AR + Days in Inventory - Days of payables outstanding

• days from when company pays cash for inventory to when company recieves cash from a sale

Debt to Equity

Total liabilites / Total Equity

• protection to creditors if bankruptcy/ lower is better

Total debt

total liabitles / total assets

• how much assets are financed by debt

equity mulitplier

total assets / total equity

Times interest Earned

EBIT / Interest expense

Asset turnover

Sales / Average total assets