Financial Statement Analysis

Reviewer for BA 99.2

Horizontal Analysis

Percentage Change = (Most Recent Value - Base Period Value) / Base Period Value

Common-size Analysis

(Individual Item / Total Assets or Net Sales) x 100

Current Ratio

LIQUIDITY

Current Assets / Current Liabilities = Decimal

Quick Ratio (Acid Test)

LIQUIDITY

Quick Assets / Current Liabilities = Decimal

Receivables Turnover

EFFICIENCY

Net (Credit) Sales / Average Receivable = Times

Average Age of Receivables

EFFICIENCY

360 Days / Receivables Turnover = Decimal (Days)

Inventory Turnover

EFFICIENCY

Cost of Goods Sold / Average Merchandise Inventory = Times

Average Age of Inventory

EFFICIENCY

360 Days / Inventory Turnover = Decimal (in Days)

Operating Cycle

EFFICIENCY

Average Age of Inventory + Average Age of Receivables = Decimal (in Days)

Trade Payables Turnover

EFFICIENCY

Net Credit Purchases / Average Trade Payables = Times

Working Capital Turnover

EFFICIENCY

Net Sales / Average Working Capital = Times

Current Assets Turnover

EFFICIENCY

(Cost of Sales + Operating Expenses) / Average Current Assets = Times

Times Interest Earned

SOLVENCY

EBIT / Interest Expense = Times

Debt-Equity Ratio

SOLVENCY

Total Liabilities / Total Stockholders' Equity = Decimal

Debt Ratio

SOLVENCY

Total Liabilities / Total Assets = Percentage/Decimal

Equity Ratio

SOLVENCY

Total Stockholders' Equity / Total Assets = Percentage/Decimal

Fixed Assets to Total Equity

SOLVENCY

Fixed Assets / Total Equity = Decimal

Gross Margin Percentage

PROFITABILITY

(Gross Margin / Net Sales) × 100 = Percentage

Return on Sales (Net Profit Margin)

PROFITABILITY

Income / Net Sales = Percentage

Return on Assets (RoA)

PROFITABILITY

Income / Average Assets = Percentage

Return on Equity (RoE)

PROFITABILITY

Income / Average Equity = Percentage

Earnings Per Share (EPS)

PROFITABILITY

(Net Income - Preferred Dividends) / Wtd. Ave. Common Shares Outstanding = Decimal (Currency)

Operating Profit Margin

PROFITABILITY

Operating Profit / Net Sales = Percentage

Price-Earnings (P/E) Ratio

MARKET TESTS

Price Per Share / Earnings Per Share = Times/Decimal

Dividend Yield

MARKET TESTS

Dividend Per Share / Price Per Share = Percentage

Dividend Pay-Out

MARKET TESTS

Dividend Per Share / Earnings Per Share = Percentage

Book Value Per Share

MARKET TESTS

Common Stockholders' Equity / Common Shares Outstanding = Decimal (Currency)