Matchless Financial Ratios Formulas Pdf
An activity ratio relates information on a companys ability to manage its resources that is its assets efficiently.
Financial ratios formulas pdf. Summary of Financial Ratio Calculations This note contains a summary of the more common financial statement ratios. Activity Inventory Cost of goods sold Inventory turnover Accounts receivable Sales on credit Accounts receivable turnover Total assets Sales Total asset turnover Fixed assets Sales. Likewise banks also use various ratios to measure the financial health of a company.
Its important to have an understanding of these important terms. The ratio gives them a guide for drawing conclusions. Investors or creditors are interested in the trend of past sales cost of goods sold operating expenses net income cash flows and return on investment.
Financial ratio formulas Prepared by Pamela Peterson Drake 1. See a Super Summary of 8 Common Financial Ratios on next page. Consistency and the intuition underlying the calculated ratio are important.
An example of this is the Profit Margin Ratio. These trends offer a means for judging management. FINANCIAL RATIO TREND ANALYSIS SUMMARY In general a thorough financial analysis of any business would include a study of the following.
Net income Net profit margin Sales 4. This list is not exhaustive. Financial ratio formula sheet prepared by Pamela Peterson-Drake 1.
Subsets of these ratios are also known as leverage and long-term debt ratios. What are financial ratios. 254- 184 BC Be not afraid of going slowly.