FAR Ratios

gross (profit) margin

= (sales - COGS) / Sales

profit margin

= net income / sales

Return on sales

= income before interest income, interest expense, and taxes / sales

return on assets

= net income / average total assets

dupont return on assets year 1

= profit margin * asset turnoverd

dupont retirn on assets year 2

= net income / sales * sales / average total assets

return on equity

= net income / average total equity

operating cash flow

= cash flow from operations / current liabilities

current ratio

= current assets / current liabilities

quick ratio

= cash and cash equivalents + short term marketable securities + receivable / current liabilities

accounts receivable turnover

= sales / average accounts receivable

days sales in accounts receivable

= ending accounts receivable / (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 accounts payable / (COGS / 365)

cash conversion cycle

= days sales in accounts receivable + days in inventory - days of payables outstanding

debt-to-equity ratio

= total liabilities / total equity

total debt ratio

= total liabilities / total assets

equity multiplier

= total assets / total equity

times interest earned

= earnings before interest and taxes / interest expense

earnings per share

= income available to common shareholders / weighed average common shares outstanding

price-to-earnings ratio

= price per share / basic earnings per share

dividend payout

= cash dividends / net income

asset turnover

= sales / average total sales

EBITDA top-down

Sales - COGS - Operating expenses (excluding depreciation and amortization)

EBITDA bottom up

net income + income tax expense + interest expenses + depreciation and amortization