Formulas

• EBIT = Sales − Costs − Depreciation

• EBT = EBIT − Interest

• Net income = EBT − Taxes = EBT × (1 − tax rate)

• OCF = EBIT + Depreciation − Taxes

• NWC = Current assets − Current liabilities; ΔNWC = NWC(end) − NWC(start)

• Net capital spending (NCS) = ΔNet fixed assets + Depreciation

• Cash flow from assets (CFFA) = OCF − ΔNWC − NCS

• CF to creditors = Interest paid − Net new borrowing (ΔLong-term debt)

• CF to stockholders = CFFA − CF to creditors = Dividends paid − Net new equity raised

Liquidity
Current ratio = Current assets / Current liabilities
Cash ratio = Cash / Current liabilities

Leverage
Total debt ratio = Total liabilities / Total assets
Equity multiplier = Total assets / Total equity
Times-interest-earned (TIE) = EBIT / Interest

Asset management / efficiency
Total asset turnover = Sales / Total assets
Fixed asset turnover = Sales / Net fixed assets

Profitability
Profit margin = Net income / Sales
Gross profit margin = (Sales − COGS) / Sales
Operating profit margin = EBIT / Sales
Return on assets (ROA) = Net income / Total assets
Return on equity (ROE) = Net income / Total equity

DuPont identity
ROE = Profit margin × Total asset turnover × Equity multiplier

Market value ratios
Earnings per share (EPS) = Net income / Shares outstanding
Price-earnings ratio (P/E) = Price per share / EPS
Book value per share = Total equity / Shares outstanding
Market/book ratio = Price per share / Book value per share

Cash flow identity
ΔCash = Cash flow from operations (CFO) + Cash flow from investing (CFI) + Cash flow from financing (CFF)
Operating cash flow (OCF) = Net income + Depreciation − ΔNWC

Payout / retention
Payout ratio = Dividends / Net income
Addition to retained earnings = Net income − Dividends