Corporate Performance & Financial Ratios

A collection of flashcards covering key concepts related to corporate performance and financial ratios.

Market Capitalization (Market cap)

The total market value of a company's outstanding shares.

Market Value Added (MVA)

Market cap minus the book value of equity.

Market-to-Book Ratio

The ratio comparing the market value of equity to its book value.

Cost of Capital

The minimum return rate required on capital investment.

Economic Value Added (EVA)

Net income plus after-tax interest minus the cost of capital times total capitalization.

Net Operating Profit After Taxes (NOPAT)

Net income plus after-tax interest.

Return On Capital (ROC)

NOPAT divided by total capitalization.

Return On Assets (ROA)

NOPAT divided by total assets.

Return On Equity (ROE)

Net income divided by equity.

Asset Turnover Ratio

Total revenue divided by total assets at the start of the year.

Inventory Turnover

Cost of sales divided by average inventories.

Receivables Turnover

Revenues divided by average accounts receivable.

Long-term Debt Ratio

Long-term debt divided by total assets.

Debt-to-Equity Ratio

Long-term debt divided by total equity.

Total Debt Ratio

Total debt divided by total assets.

Cash Coverage Ratio

EBIT plus depreciation divided by interest expense.

Quick Ratio (Acid Test)

Quick assets divided by current liabilities.

Current Ratio

Current assets divided by current liabilities.

Net Working Capital

Current assets minus current liabilities.

Profit Margin

Net income divided by revenues.

Debt Service Coverage Ratio (DSCR)\n\n

Net operating income divided by total debt service obligations.\n\n

Return On Investment (ROI)\n\n

Net profit divided by the cost of the investment, expressed as a percentage.\n\n

Gross Margin Ratio\n\n

Gross profit divided by total revenue, expressed as a percentage.\n\n

Operating Margin Ratio\n\n

Operating income divided by total revenue, expressed as a percentage.\n\n

Return On Equity (ROE)\n\n

Net income divided by total equity, expressed as a percentage.\n\n

Total Asset Turnover\n\n

Total revenue divided by average total assets during the period.\n\n