FAR Ratio Analysis

Current Ratio

= Current Assets / Current Liabilities

Quick Ratio (Acid Test Ratio)

= (Current Assets - Inventory) / Current Liabilities

Cash Ratio

= (Cash + Marketable Securities) / Current Liabilities

Cashflow Ratio

= Operating CF / Current Liabilities

Working Capital

= Current Assets + Current Liabilities

Inventory Turnover Ratio

= COGS / Avg Inventory

Inventory Conversion Period

= 365 / Inventory Turnover Ratio

Accounts Receivable Turnover Ratio

= Net Credit Sales / Avg Accounts Receivable

Accounts Receivable Collection Period

= 365 / Accounts Receivable Turnover Ratio

= (365 x End Accounts Receivable) / Net Credit Sales

Accounts Payable Turnover Ratio

= COGS / Avg Accounts Payable

Accounts Payable Deferral Period

= 365 / Accounts Payable Turnover Ratio

= (365 x End Accounts Payable) / COGS

Total Asset Turnover Ratio

= Net Sales / Avg Total Assets

Fixed Asset Turnover Ratio

= Net Sales / Avg Fixed Assets

Working Capital Turnover Ratio

= Net Sales / Avg Working Capital

Gross Profit Margin Ratio

= Gross Profit / Net Sales

Operating Profit Margin Ratio

= Operating Income / Net Sales

EBITDA Margin Ratio

= EBITDA / Net Sales

Net Profit Margin Ratio

= Net Profit / Net Sales

Return on Assets Ratio

= Net Income / Avg Total Assets

Return on Equity Ratio

= Net Income / Avg Total Equity

Return on Capital Ratio

= Operating Income / Capital Employed

Degree of Operating Leverage

= % change in EBIT / % change in Sales

= CM / EBIT

Degree of Financial Leverage

= % change in Net Income / % change in EBIT

= EBIT / EBT

Degree of Total Leverage

= % change in Net Income / % change in Sales

= DOL x DFL

Equity Multiplier

= Total Assets / Total Equity

Debt to Equity Ratio

= Total Liabilities / Total SE

Long-Term Debt to Equity Ratio

= Long-Term Liabilities / SE

Debt-to-Assets Ratio

= Total Liabilities / Total Assets

Times Interest Earned Ratio

= EBIT / Interest Expense

Fixed Charge Coverage Ratio

= Earnings before fixed charges and tax / Fixed Charges