FSA Ratios

P/E ratio

market value per share / earnings per share (EPS)

ROA

(NI / sales) x (sales / assets) = NI / assets

ROE

(NI / sales) x (sales / assets) x (assets / equity) = NI / equity

Dividend yield

dividends per year / price per share

Normalized Net Income

(EBT - unusual items) x (1 - tax rate) - NC

Gross Margin

(sales - cost of sales) / sales

Gross Margin %

[(sales - cost of sales) / sales] x 100

Sustainable Growth Rate

ROE x (1 - dividend payout ratio)

• Dividend payout ratio = cash dividends / NI

Net Income %

NI / sales

EPS

NI / Avg outstanding shares

Effective Tax Rate %

Income tax expense / EBT

(or Provision for income taxes / Income before provision for taxes)

COGS %

COGS / Total rev (or sales)

P/B ratio

market cap / Total SHs equity (aka BV)

AR Turnover

sales / AR

Days Receivable

AR / (sales/365)

Inventory Turnover

COGS / Inventory

Days Inventory

Inventory / (COGS/365)

Days Payable

AP / (purchases/365)

PP&E Turnover

sales / net PP&E

Free Cash Flow

operating cash flow - investment in LT assets

PV (Present Value)

FV / (1 + r) ^t

Discounted abnormal earnings

current book equity + PV of future abnormal earnings

CAPM

risk free rate + (beta x market risk premium)

Current Ratio

current assets / current liabilities