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Financial Metrics Ratios List
Metric or Ratio Name | Formula | Category | Description | Related Business Reports |
|---|---|---|---|---|
Current Ratio | Current Assets ÷ Current Liabilities | Liquidity (Short-term Health) | Measures ability to pay short-term debts | Balance Sheet |
Quick Ratio (Acid Test) | (Current Assets - Inventory) ÷ Current Liabilities | Liquidity (Short-term Health) | A more stringent test that excludes inventory (which may be hard to sell quickly) | Balance Sheet |
Cash Ratio | Cash and Equivalents ÷ Current Liabilities | Liquidity (Short-term Health) | The most conservative measure, looking only at cash and equivalents | Balance Sheet |
Gross Profit Margin | (Revenue - Cost of Goods Sold) ÷ Revenue | Profitability (Earnings Power) | Efficiency of production/service delivery | Income Statement |
Net Profit Margin | Net Income ÷ Revenue | Profitability (Earnings Power) | The "bottom line" efficiency after all expenses and taxes | Income Statement |
Return on Assets (ROA) | Net Income ÷ Total Assets | Profitability (Earnings Power) | How efficiently management uses assets to generate earnings | Income Statement |
Return on Equity (ROE) | Net Income ÷ Shareholder's Equity | Profitability (Earnings Power) | Profit generated for every dollar of shareholder investment | Income Statement, Balance Sheet |
Inventory Turnover | Cost of Goods Sold ÷ Average Inventory | Efficiency / Activity (Operational Flow) | How many times a company has sold and replaced its inventory during a period | Income Statement, Balance Sheet |
Accounts Receivable (AR) Turnover | Net Credit Sales ÷ Average Accounts Receivable | Efficiency / Activity (Operational Flow) | How quickly the company collects payments from customers | Income Statement, Balance Sheet |
Days Sales Outstanding (DSO) | (Average AR ÷ Total Credit Sales) x Number of Days | Efficiency / Activity (Operational Flow) | The average number of days it takes to collect payment | Income Statement, Balance Sheet |
Debt to Equity Ratio | Total Debt ÷ Shareholder's Equity | Leverage & Solvency (Long-term Stability) | The proportion of equity and debt used to finance the company's assets | Balance Sheet |
Interest Coverage Ratio | EBIT ÷ Interest Expense | Leverage & Solvency (Long-term Stability) | How easily a company can pay interest on its outstanding debt | Income Statement, Balance Sheet |
Debt-to-Assets Ratio | Total Debt ÷ Total Assets | Leverage & Solvency (Long-term Stability) | The percentage of assets financed by creditors | Income Statement, Balance Sheet |
Price-to-Earnings (P/E) Ratio | Market Value per Share ÷ Earnings per Share | Market Value (Investor Perspective) | The amount an investor can expect to invest in a company in order to receive one dollar of that company’s earnings | Income Statement, Market Valuation |
Dividend Yield | Annual Dividends per Share ÷ Price per Share | Market Value (Investor Perspective) | Financial ratio that shows how much a company pays out in dividends each year relative to its stock price | Income Statement, Market Valuation |
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