FINANCIAL STATEMENTS ANALYSIS
FORMULAE GUIDE
a) LIQUIDITY AND ASSET RATIOS
c) DEBT MANAGEMENT RATIO: Horizontal Analysis
Current ratio
Times Interest Earned Ratio Change in AMT = (CY-BY)
CR= Current Assets / Current Liabilities
TIER= EBIT / Interest Change in %
Quick Ratio
Debt Ratio = ((CY-BY) /BY) * 100
QR= (Current assets - Inventory – Prep.
Expenses) / Current Liabilities DR= Total Debt / Total Asset
QR= (Cash + A/R+ marketable securities+ Debt to Equity Vertical Analysis
short term investments) / Current liabilities
DtE= Total Debt / Total Equity Asset %
Receivable Turnover
Equity Ratio = (Asset acct / total assets) * 100
RTO= Net Credit Sales / Average A/R
ER= Total Equity / Total Assets
Average receivable
d)MARKET VALUE RATIOS: Liabilities & Equity %
= (A/R beg + A/R end) / 2
Earnings per share = (L & E acct/ Total L & E) *100
Net credit sales
EPS= Net income/ Common shares
NCS= Gross sales - Cash Sales outstanding
Income %
Average Collection Period: Book-value-per share
= (Income acct / total sales) * 100
ACP= # of operating days/RTO BVS= Total equity/ Common shares
outstanding
Inventory Turnover
Price/Earnings ratio Expense %
ITO= Cost of Goods Sold / Average Inventory
P/E = Market Price per share/ EPS = (Expense acct / total sales) * 100
Average Inventory
Market/ Book Ratio:
= (Inv. beg + Inv. end) / 2
M/B= market price per share/ BVS
Average Sales Period
Total Equity
ASP= # of operating days/ITO
TE= Common shares + retained earnings +
b) PROFITABILITY RATIOS: preferred shares
Gross Profit Margin EBITDA
GPM= Gross Profit / Net Sales EBITDA XX
Net Profit Margin Depreciation (XX)
NPM=Net profit / Net sales Amortization (XX)
Operating Profit Margin EBIT XX
Operating Margin= EBIT/ Sales Interest (XX)
EBT XX
Tax expense (XX) PREPARED BY:
Net Income XX JACQUELINE CHELSEA TEDOCO, MICB, MBA
Tax expense
Tax = EBT * Tax rate
