F2 Formulas

gross (profit) margin

(net sales - COGS)/net sales

profit margin

net income/net sales

income before interest income, interest expense, & taxes/net sales

return on assets (ROA)

net income/average total assets

DuPont return on assets

profit margin x asset turnover

net income/net sales x net sales/average total assets

return on equity

net income/average total equity

operating cash flow ratio

cash flow from operations/current liabilities

current ratio

current assets/current liabilities

quick ratio

current asset minus inventory & prepaids/current liabilities

accounts receivable turnover

net sales/net average accounts receivable

days sales in accounts receivable

net ending AR/(net sales/365)

inventory turnover

COGS/average inventory

days in inventory

ending inventory/(COGS/365)

accounts payable turnover

COGS/average accounts payable

days of payables outstanding

ending AP/(COGS/365)

cash conversion cycle

days sales in AR + days in inventory - days of payables outstanding

debt to equity

total liabilities/total equity

total debt ratio

total liabilities/total assets

equity multiplier

total assets/total equity

times interest earned

EBIT/interest expense

EBIT = earnings before interest & taxes

earnings per share (EPS)

income available to common SH/weighted average common shares outstanding

price to earnings ratio

price per share/basic EPS

dividend payout

cash dividends/net income

asset turnover

net sales/average total assets