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Comprehensive Guide to Ratio Analysis

The document outlines various financial ratios used for analyzing a company's performance, categorized into liquidity, efficiency, leverage, coverage, and profitability ratios. Each ratio is defined with its formula, such as the current ratio, quick ratio, and return on equity. Additionally, it includes the Z-Score calculation for assessing financial stability.

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gunash.aliyeva.111
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36 views3 pages

Comprehensive Guide to Ratio Analysis

The document outlines various financial ratios used for analyzing a company's performance, categorized into liquidity, efficiency, leverage, coverage, and profitability ratios. Each ratio is defined with its formula, such as the current ratio, quick ratio, and return on equity. Additionally, it includes the Z-Score calculation for assessing financial stability.

Uploaded by

gunash.aliyeva.111
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Ratio Analysis

Liquidity Ratios:
Total Current Assets
Current Ratio=
Total Current Liabilities

Total Current Assets−Inventory


Quick Ratio=
Total Current Liabilities

Efficiency Ratios:
COGS
Industry Turnover=
Inventory

' 360
Da y s Sales∈ Inv=
Industry Turnover

Sales
Acc . Receiv Turnover=
Accounts Receivable

360
Average Coll . Period=
Acc . Receiv Turnover

Sales
¿ Asstes Turnover=
Net PP∧E

Sales
Total Assets Turnover=
Total Assets

COGS
Acc . PayablesTurnover=
Accounts Payable
360
Avrage Payment Period =
Acc . Payables Turnover

Leverage Ratios:

Total Liabilities
Total Debt Ratio=
Total Assets

Long−term Debt
Long−term Debt Ratio=
Total Assets

Long−term Debt
LTD ¿ Total Cap= '
Total Shareholde r s Equity+ Long−term Debt

Long−term Debt
Long−term Debt ¿ Equity=
Total Shareholder ' s Equity

Total Liabilities
Total Debt ¿ Equity=
Total Shareholder ' s Equity

Coverage Ratios:
EBIT
¿ Interest Earned=
Interest Expense

EBIT + Depreciation Expense


Cash Coverage Ratio=
Interest Expense

'
Cash ConversionCycle= Average Coll. Period+ Da y s Sales∈ Inv− Avrage Payment Period

Profitability Ratios:
Gross Profit
Gross Profit Margin=
Sales

EBIT
Operating Profit Margin=
Sales

EBIT + Depreciation Expense


EBITDA Margin=
Sales

Net Income
Net Profit Margin=
Sales

Net Income
Returnon Total Assets=
Total Assets

Net Income
Returnon Equity=
Total Shareholder ' s Equity

Net Income
Returnon Common Equity=
Common Stock

Turnover∗Total Assets
DuPont ROE=Net Profit Margin∗Total Assets
Total Shareholder ' s Equity

0.717∗Total Current Assets−Total Current Liabilities 0.847∗Reatined Earnings 3.107∗EBIT 0.


Z−Score= + + +
Total Assets Total Assets Total Assets

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