MBA Class

cf_financial_ratio_chart1.docx

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Financial Ratios Chart

Liquidity	2011	2012	2013	Industry average
Current ratio				2.4
Cash ratio				0.9
Asset Management
Inventory turnover in days				57
A/R turnover in days				14
A/P turnover in days				25
Cash conversion cycle				46
Fixed asset turnover ration				3.4
Total asset turnover ration				2.03
Long-Term Debt-Paying Ability
Long-term debt to total capitalization				21%
Effective interest rate				7.3%
Profitability
Gross profit margin				27%
Operating profit margin				5.8%
Net profit margin				2.6%
ROA				6.5%
ROE				17.1%

Liquidity	Formula
Current ratio	Current assets / current liabilities
Cash ratio	(Cash + marketable securities) / current liabilities
Asset Management
Inventory turnover ratio	Cost of goods sold / inventories (average)
Inventory turnover in days	365 / inventory turnover ratio
A/R turnover in days	365 / AR turnover [AR turnover = net credit sales / average AR]
A/P turnover in days	365 / AP turnover [AP turnover = cost of goods sold / Average AP]
Cash conversion cycle	Inventory turnover in days – AP turnover in days + AR turnover in days
Fixed asset turnover ratio	Net sales / average fixed (capital) assets
Total asset turnover ratio	Net sales / average total assets
Long-Term Debt Paying Ability
Long-Term debt to total capitalization	Long-term debt / (long-term debt + common/preferred shares)
Effective interest rate	Interest expense / total long-term debt
Profitability
Gross profit margin	Gross Profits / Net Sales
Operating profit margin	Operating income (EBIT) / Net Sales
Net profit margin	Net income / net sales
ROA (return on assets)	Net income / total assets
ROE (return on equity)	Net income / shareholders’ equity [shareholders' equity = share capital + retained earnings]