Key Financial Ratios and Their Formulas

Current Ratio

Formula: Current Assets / Current Liabilities

Quick Ratio

Formula: (Current Assets - Inventory) / Current Liabilities

Cash Ratio

Formula: Cash + Cash Equivalents / Current Liabilities

Working Capital

Formula: Current Assets - Current Liabilities

Debt-to-Equity Ratio

Formula: Total Liabilities / Shareholders' Equity

Equity Multiplier

Formula: Total Assets / Total Equity

Times Interest Earned

Formula: EBIT / Interest Expense

Debt Ratio

Formula: Total Liabilities / Total Assets

Long-term Debt to Capitalization

Formula: Long-term Debt / (Long-term Debt + Equity)

Gross Profit Margin

Formula: (Revenue - COGS) / Revenue

Operating Margin

Formula: Operating Income / Revenue

Net Profit Margin

Formula: Net Income / Revenue

Return on Assets (ROA)

Formula: Net Income / Total Assets

Return on Equity (ROE)

Formula: Net Income / Shareholders' Equity

Inventory Turnover

Formula: COGS / Average Inventory

Accounts Receivable Turnover

Formula: Net Credit Sales / Average Accounts Receivable

Accounts Payable Turnover

Formula: COGS / Average Accounts Payable

Asset Turnover Ratio

Formula: Net Sales / Total Assets

Fixed Asset Turnover

Formula: Net Sales / Net Fixed Assets

Price-to-Earnings (P/E) Ratio

Formula: Market Price per Share / Earnings per Share (EPS)

PEG Ratio

Formula: P/E Ratio / Earnings Growth Rate

Price-to-Book (P/B) Ratio

Formula: Market Price per Share / Book Value per Share

Dividend Yield

Formula: Annual Dividends per Share / Market Price per Share

Enterprise Value to EBITDA

Formula: Enterprise Value / EBITDA

DuPont ROE

Formula: Net Profit Margin × Asset Turnover × Equity Multiplier