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All Formula For Financial Statement - Ratio Analysis

This document outlines various financial ratios used to analyze companies, including liquidity ratios like current and quick ratios, activity ratios like inventory turnover and average collection period, debt ratios like debt ratio and times interest earned, and profitability ratios like gross profit margin, net profit margin, return on assets, and return on equity. It provides the formulas for calculating each ratio and notes where to find the components in a company's financial statements.

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779 views2 pages

All Formula For Financial Statement - Ratio Analysis

This document outlines various financial ratios used to analyze companies, including liquidity ratios like current and quick ratios, activity ratios like inventory turnover and average collection period, debt ratios like debt ratio and times interest earned, and profitability ratios like gross profit margin, net profit margin, return on assets, and return on equity. It provides the formulas for calculating each ratio and notes where to find the components in a company's financial statements.

Uploaded by

raju710@gmail.com
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
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Chapter: Financial Statement and Ratio Analysis

1. Current ratio = Current assets / Current Liabilities (Note-1 : Search from Balance
sheet, Note-2: It will result on : )

Liquidity Ratios:

2. Quick Ratio = (Current Assets – Inventory) / Current Liabilities (Note-1 : Search from
Balance sheet, Note-2: It will result on : )

Activity ratios:

3. Inventory turnover = Cost of goods sold / Inventory (Note-1 : Search Cost of Good
Sold from Income Summary and search Inventory from Balance sheet, Note-2: It will
result on Times)
4. Average collection period = Accounts receivable /average sales per day

= Accounts receivable / (annual sales /365) (Note-1: Search Account


Receivable from Balance Sheet and search Annual Sales from Income
Statement/summary, Note-2: It will result on Days)

5. Average Payment period = Accounts payable / average purchase per day

= Accounts payable/ (annual purchase/365) (Note-1: Search Account


Payable from Balance Sheet and search Annual Purchase from Income
Statement/summary, Note-2: It will result on Days)

6. Total assets turnover = Sales / total assets (Note-1 : Search Sales from Income
Summary and search Total Assets from Balance sheet, Note-2: It will result on
Times)

 Debt/Solvency Ratio:

7. Debt ratio = Total liabilities / Total assets (Note-1: Both are Search from Balance
sheet, Note-2: It will result on %)

The times interest earned ratio:

8. Times Interest earned ratio = Earnings Before Interest and Taxes (EBIT) / Interest
(Note-1 : Both are Search from Income Statement, Note-2: It will result on Times)
 Profitability Ratio:

9. Gross profit margin = (Sales – cost of goods sold)/ Sales

=Gross profit / Sales (Note-1: Both are Search from Income


Statement, Note-2: It will result on %)

10.Operating profit margin = Operating Profits / Sales (Note-1: Both are Search from
Income Statement, Note-2: It will result on %)
11.Net profit margin = Earnings available for common stockholders (Net Profit) / Sales
(Note-1: Both are Search from Income Statement, Note-2: It will result on %)
12.Earnings per share (EPS) = Earnings available for common stockholders/ number of
share of common stock outstanding (Note-1 : Search Earnings available for common
stockholders from Income Summary and search number of share of common stock
outstanding from Balance sheet, Note-2: It will result on Tk)
13.Return on total assets (ROA) = Earnings available for common stockholders / Total
assets. (Note-1: Search Earnings available for common stockholders from Income
Summary and search Total Assets from Balance sheet, Note-2: It will result on %)
14.Return on common equity (ROE) = Earnings available for common stockholders /
common stock equity (Note-1: Search Earnings available for common stockholders
from Income Summary and search Common Stock Equity from Balance sheet, Note-
2: It will result on %)
15.Price/earnings(P/E) ratio = Market price per share of common stock/Earnings per
share (EPS) (Note-1 : Search Market price per share of common stock from Balance
Sheet and search Earnings per share (EPS) from calculation, Note-2: It will result on
Times)
16.Book value per share of common stock = common stock equity / number of share of
common stock outstanding (Note-1 : Both are Search from Balance Sheet, Note-2: It
will result on Tk)
17. Market / Book(M/B) ratio = market price per share of common stock/ Book value
per share of common stock (Note : Search Market price per share of common stock
from Balance Sheet and search Book value per share of common stock from
calculation)

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