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This column is the name of the ratio This column is the formula used to calculate the ratio? This column describes how the ratio is used.
PROFITABILITY RATIOS
Shows productivity of the company in terms of its use of assets to generate profits.
Return on Equity
This ratio shows how efficiently the company is using common shareholder's equity.
Profit Margin
This measure narrows the focus to gain a better understanding of a company's ability to generate returns from its available capital base.
Inventory Turnover
How much inventory are you carrying? How long does it take you to sell it? The Inventory Turnover ratio tells you the number of times inventory was sold in the period.
Receivables Turnover
Indicates operating leverage and efficient utilization of asset. Higher the better.
LIQUIDITY RATIOS
Current Ratio
Shows the companys ability to meet its current obligations (or pay off debt).
This is similar to the Current Ratio. The difference is Current Assets Inventory Prepaid items Current Liabilities that it does not include assets that cannot be quickly converted to cash. The higher the number, the more liquid the company.
Quick Ratio
LEVERAGE RATIOS
This one is all about cash flow. It is an indicator of your ability to cover principal payments with current cash flows.
EBIT / Interest
MARKET VALUE RATIOS / INVESTMENT RATIOS Ratio of a company's current share price compared to its per-share earnings. Allows investors to compare the latest dividend they received with the current market value of the share as an indictor of the return they are earning on their shares.
The portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability