Financial Ratios: ROE, ROA, Profit Margin, Turnover & Leverage

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13 Terms

1
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Return on Equity (ROE)

Net Income / Stockholders' Equity

2
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Return on Assets (ROA)

Net Income / Total Assets

3
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Net Profit Margin

Net Income / Sales

4
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Asset Turnover

Sales / Total Assets

5
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Financial Leverage

Total Assets / Stockholders' Equity

6
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Current Ratio

Current Assets / Current Liabilities

7
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Quick ratio

Cash+ short term investments + account receivable/ current liabilities

8
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ROE

ROA x Financial Leverage


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ROA

Asset Turnover x Profit Margin

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Days Sales Outstanding

365 x Account Receivable/sales

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Days Inventory Outstanding

365 x Inventories/COGS

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Days Payables Outstanding

365 x Accounts Payable/COGS

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Cash Conversion Cycle

DSO + DIO - DPO