RATIOS ANALYSYS

LIQUIDITY RATIOS:

* Current Ratio = Current Assets / Current Liabilities * Quick Ratio = (Current Assets – Ending Inventory) / Current Liabilities

ACTIVITY RATIOS:

* Inventory Turnover = COGS / Ending Inventory * Days of Inventory = Ending Inventory / (COGS/365) * Days of sales outstanding (DSO) = Ending A/R / (Credit Sales / 365 days) * Days of Purchases outstanding (DPO) = Ending A/P / (Purchases / 365 days) * Asset Turnover = Sales / Ending Assets

LEVERAGE RATIOS:

* Total Leverage Ratio = Total Debt / Ending Total Assets * Long-term Leverage Ratio = Long-term debt / Ending total assets * Interest Coverage Ratio = EBIT(D?) / Interest Payments * Debt Ratio: Non-current Liabilities/(Non-Curr. Liab. + Equity)

PROFIT RATIOS:

* Gross Margin = (Sales – COGS) / Sales    or   Gross Income/Sales * Net Profit Margin = Earnings After Taxes (EAT)/ Sales * Operating Margin = EBIT (earning before interest & tax or operating income)/Sales * Before Interest & Tax Return on Assets (BTROA) = EBIT / Beginning Assets * After Tax Return on Assets (ATROA) = Earnings after taxes / Beginning Assets * After Tax Return on Equity (ROE) = EAT / Beginning Owner’s Equity      (Beg. Own. Equity = R.E. + Comm. Stock – EAT (this year) + Div (this year) * COGS Ratio = COGS / Sales * Operating Expense Ratio = Operating Expense / Sales * Working Capital Ratio = (Current Assets – Current Liabilities) / Sales

DEPONT ANALYSIS

* Return on Assets(ROA)=EAT/beginning total assets =asset turnover x net profit margin=(sales/beginning assets) x (EAT/sales) * Return on equity(ROE)=EAT/beginning owner’s equity =(sales/begin asset)x(EAT/sales)x(begin asset/owner equity(assets-debt)) =asset turnover x net profit margin x equity multiplier