Liquidity ratios 01. Current Ratio = Current Asset / Current Liability 02.

Quick Ratio = (Cash + Marketable securities + account receivables) / Current Liability 03. Cash Ratio = (Cash + Marketable securities)/current Liability 04. Working Capital = Current Assets Current Liabilities 05. Working Capital Turnover Ratio = Cost of Sales / Working Capital 06. Cash flow from operations ratio =Cash Flow from Operations / Current Liability 07. Receivable Turnover = net annual sales / average receivables 08. Average Number of days receivables outstanding (Average Collection period) = 365/receivables turnover 09. Inventory Turnover = Cost of goods sold (COGS) / average inventory 10. Average Number of days in stock = 365/ Inventory turn over 11. Payable Turnover = Annual Purchases / Average Payables 12. Average Number of days payables outstanding (Average age of payables) = 365 / payable turnover 13. Cash Conversion Cycle = Average collection period + average number of days in stock average age of payables Profitability Ratios 01. Growth Profit Margin = gross profit / net sales; where gross profit = net sales COGS 02. Operating Profit Margin = Operating Income / net sales; where Op. Income = Earnings before tax & interest (EBIT) 03. EBITDA margin = Earnings before interest, tax, depreciation and amortization / net sales 04. Net Margin (Profit Margin) = net income / sales 05. Contribution Margin = Contribution / sales; where contribution = sales variable cost Return on investment Ratios. 01. Return on Assets (ROA) = EBIT /average total assets 02. Return on common equity = (net income preferred dividends)/average common equity OR Net profit margin * Asset turnover * Equity multiplier 03. Return on Total equity (ROE) = net income / average total equity Operating Efficiency Ratios 01. Total Asset turnover = net sales/average total assets 02. Fixed asset turnover = net sales / average net fixed assets 03. Equity turnover = net sales / average total equity Financial Risk Ratios / Solvency Ratios 01. Debt to Total Capital = total debt / total capital 02. Debt to Equity = Total debt / total equity 03. Equity Multiplier = Return on Equity / Return on Assets 04. Financial leverage = average total assets / average total equity 05. Times Interest Earned / Interest Coverage Ratio = EBIT / interest expense 06. CFO to debt = Cash flow from operations / total debt 07. Fixed charge coverage = earnings before fixed charges and taxes / fixed charges Valuation ratios 01. Price to earnings (P/E) ratio = current market price of the common stock / company earnings per share 02. Earnings per share = (net income dividends on preferred stock) / weighted average number of shares outstanding 03. Earnings per share = Dividends / dividend payout ratio 04. Sustainable growth rate = Retention rate * ROE; where retention rate = 1 dividend declared /net income Stock splits and stock dividends should be considered to have been outstanding since the beginning of the year When dividend is declared, current liabilities increase; when it is paid, current assets and current liabilities decrease by same amount

Direct Materials Variances: Materials purchase price variance = (Actual quantity purchased Actual price) (Actual quantity purchased Standard price) Materials price usage variance = (Actual quantity used Actual price) (Actual quantity used Standard price) Materials price usage variance = (Actual quantity used Standard price) (Standard quantity allowed Standard price) Materials mix variance = (Actual quantities at individual std materials costs) (Actual quantities at weighted average of std materials costs) Materials yield variance = (Actual quantities at weighted average of standard materials costs) (Actual output quantity at standard materials cost) Direct Labor Variances: Direct labor rate / price variance = (Actual hours worked Actual rate) (Actual hours worked Standard rate) Direct labor efficiency / usage / quantity = (Actual hours worked Standard rate) (Standard hours allowed Standard rate) Direct labor yield variance = (Std hours allowed for expected output Std labor rate) (Std hours allowed for actual output Std labor rate) Factory Overhead Variances: Factory overhead controllable variance formula = (Actual factory overhead) (Budgeted allowance based on standard hours allowed*) Factory overhead volume variance = (Budgeted allowance based on standard hours allowed*) (Factory overhead applied or charged to production**) Factory overhead spending variance = (Actual factory overhead) (Budgeted allowance based on actual hours worked***) Factory overhead idle capacity variance = (Budgeted allowance based on actual hours worked***) (Actual hours worked Std overhead rate) Factory overhead efficiency variance = (Actual hours worked Std overhead rate) (Std hours allowed for expected output Std overhead rate) Variable overhead efficiency variance = (Actual hours worked Std variable overhead rate) (Std hours allowed Std variable overhead rate) Variable overhead efficiency variance = (Actual hours worked Fixed overhead rate) (Standard hours allowed Fixed overhead rate) Factory overhead yield variance = (Std hours allowed for expected output Std ovrhd rate) (Std hours allowed for actual output Std overhead rate) *Fixed overhead budgeted + Standard hours allowed Standard variable overhead rate **Standard hours allowed for actual production Standard overhead rate ***Fixed overhead budgeted + Actual hours worked Standard variable overhead rate