financial ratios

Current Ratio Formula

Current Assets / Current Liabilities

Current Ratio

Liquidity Ratio

Acid-Test Ratio Formula

(Current Assets – Inventories) / Current Liabilities

Acid-Test Ratio

Liquidity

Cash Ratio Formula

Cash and Cash Equivalents / Current Liabilities

Cash Ratio

Liquidity

Operating Cash Flow Ratio Formula

Operating Cash Flow / Current Liabilities

Operating Cash Flow Ratio

Liquidity

Debt Ratio Formula

Total Liabilities / Total Assets

Debt Ratio

Leverage

Debt-to-Equity Ratio Formula

Total Liabilities / Shareholders’ Equity

Debt-to-Equity Ratio

Leverage

Interest Coverage Ratio Formula

Operating Income / Interest Expenses

Interest Coverage Ratio

Leverage

Debt Service Coverage Ratio Formula

Operating Income / Total Debt Service

Debt Service Coverage Ratio

Leverage

Asset Turnover Ratio Formula

Net Sales / Average Total Assets

Asset Turnover Ratio

Efficiency

Inventory Turnover Ratio Formula

Cost of Goods Sold / Average Inventory

Inventory Turnover Ratio

Efficiency

Receivables Turnover Ratio Formula

Net Credit Sales / Average Accounts Receivable

Receivables Turnover Ratio

Efficiency

Days Sales in Inventory Formula

365 Days / Inventory Turnover Ratio

Days Sales in Inventory

Efficiency

Gross Margin Ratio Formula

Gross Profit / Net Sales

Gross Margin Ratio

Profitability

Operating Margin Ratio Formula

Operating Income / Net Sales

Operating Margin Ratio

Profitability

Return on Assets (ROA) Formula

Net Income / Total Assets

Return on Assets (ROA)

Profitability

Return on Equity (ROE) Formula

Net Income / Shareholders’ Equity

Return on Equity (ROE)

Profitability

Book Value per Share Formula

(Shareholders’ Equity – Preferred Equity) / Total Common Shares Outstanding

Book Value per Share

Market Value

Dividend Yield Ratio Formula

Dividend per Share / Share Price

Dividend Yield Ratio

Market Value

Earnings per Share (EPS) Formula

Net Earnings / Total Shares Outstanding

Earnings per Share (EPS)

Market Value

Price-Earnings (P/E) Ratio Formula

Share Price / Earnings per Share

Price-Earnings (P/E) Ratio

Market Value

Market Value Defintion

current share price of a company’s stock relative to earnings, equity, or dividends

Profitability Defintion

company’s ability to generate income relative to sales, assets, equity, or costs

Efficiency Defintion

how well a company uses its assets and resources to generate revenue

Leverage Defintion

the level of debt in a company’s capital structure and its ability to meet financial obligations

Liquidity Defintion

company’s ability to repay short-term and long-term obligations using its current assets