FAR Exam Formulas/Notes

Dividend Yield =

(market $ per SH / dividend $ per SH)

P/E (Price-Earnings) Ratio

market $ per SH / EPS

asset turnover ratio

total sales / total average assets

payout ratio

dividend $ per SH
/

EPS

current ratio =

Current Assets
/

Current Liabilities

quick ratio (acid ratio)

Quick Assets (Cash + Cash Equivalents + Receivables + Short-term Marketable Securities)
/

Current Liabilities

fixed asset turnover

Revenue/Net sales

/

Fixed Assets

Accounts Receivable Turnover

net CREDIT sales / avg. accounts receivables

Debt-to-Assets Ratio

Total Debt / Total Assets

Debt-to-Equity Ratio

Total Debt / Total SHE

Inventory Turnover Ratio

COGS / Average Inventory

ROE (common)

(NI - PS) / Average Common SHE

ROA

NI / Total Assets

ROI

Net Profit / Invested Capital (@ a point in time or an avg. amt)

EPS

NI - PS / Weighted Avg. # SH O/S