Formulas

Shorterm
solvency Hliquiding ratios

:
current asseys
Current
1) ratio =

current liabilities

company ability to
pay short obligations or those due

-term
's
within one
year

.
Tt low = risu of defaula I distress
s
Tt high efficienty
ts
is
using
not assers
management

assers -
inves

tory
2) Quick ratio current
=
cerrent liabilities

short
company abiliy t
quicky convert asseys into
's
0
-term
cash

Lenders and investors decide whether a business is a good bet for a

loan or investment

it ligh = able o survive

emergencies that create
temporary
cash
s
flow problems
.
cash
3) Cash ratio
cuurrent liabilities

company abilizy o
pay
off all liabilities with cash and cash equira
's
lents
.
Long solvency Ifinancial leverage
-term
4) Total debt
assets - equiny
- total debt
total

ratio total
-
fotal asseTs total assers

it high leveraged and borrowed

=
company is
higby more than it can
s
easiy pay
back
.
5) Debt E Teainbing
::""
ratio =
-equiny
it high - more risk
flinancial leverage
s
if low =3 business is not taving advantage of deby to expand
assers
otal
6) Equity multiplier :

otal
equity
financial leverage which is the arount of
money
the
campany has borrowed
finance he of
,
o purchase assets
.
It high =3 more debt o finance its assets

it low =3 less debt

7 Times interest earned
ratio

-EiBie'ist
f
debt
company abiling to meet its
obligations based on its current income

's
.
how times a
companry
could cover its interest charges with its
many pretax
earnings

EFB Depreciation
8) Cash Coverage

-TT+
=

Interest

amouent of cash arailable for an interest

expenses
o pay

Asset uilization turnover ratio

sold
cost of goods
9) Inrentory turnover -

Inventory
Rate that
inventory sock is
sold Jused freplaced
it
high =3 strong sales

i t l ow = wean sales
s
365 days
10) Days sales in
inventory
'
-

Inrenory turnover

average number of days a business requires $ srn its invenory into sales
o
it high = t much
00
s
 Formulas checu

:
ratio Payables T

=
4p9s
Current turnover =

CA
Qwicu Days -55

-Invenror
r
ratio
СС
costs in
payables -

=
cash
Cash Ratio =

CL
Tosal asset ner nover
Я!""
==

йны
Total debt ratio
Capital Intensiry -'

cles
Deb ratio Profit margin -
+-equiny
aties
Equiy multiplier
=
? донй
Times Interest earmed ratio
- дойййаезх-хй
R?etes
share
per
ЕВЕТ+ верг. price
Cash Coverage ratio
r

Interest Price ratio i

earnings p

-earnings
.S.
p

nEren sory ratio

.s.
-prise
price
'
Tnrentory turnover Tatio I
=
sales p

-sales
.S.
ЗБ5 marnes value p

.S.
Market book ration -
Days Trventory
r
to
sales in
I

THV eer nover

pook raskee P

.S.
.
valretdebst
Enterprise valce equiry

жан

-cash
-

Receivables eer nover

-
EBITD rato -

ЕВЕТДЖ Е
Н
DR
BITDT
Days sales in Receivables
-
ДТ

Cash flow from assets = cash fow to creditors + cash flow ostocuholders

Cash flow from operating cash - capisal spendiong - WWC

assets
- in
f l ow
Change
Nex
cash Hlo IBTTT dep re c i a s i o
Operasines
-taxes
+
ner fexed net f Tdepree
spending -
ending assess
het capiral
.
.H.
-beginninng
Cash flow o crediors Paid Inferes - net new bornowing
:
Cash flow to stoceholders - Paid dividends -

ses new equity