Common Financial & Accounting Ratios & Formulas Cheat Sheet
by David Pollack (Davidpol) via cheatography.com/2754/cs/4538/
Introd๎uction
Accounting ratios are widely used tools of financial analysis. If p roperly analyzed, they help identify areas on the financial statem ent needing further
analysis.
A ratio is a mathem๎atical relation between two quantities ex pressed as a percen๎tage, a rate or propor๎tion.
Short Term Solvency or Liquidity Ratios
Current Ratio = Current Assets / Current Liabil๎ities
Quick Ratio = (Current Assets โ Inventory) / Current Liabil๎ities
Cash Ratio = Cash / Current Liabil๎ities
Net Working Capital = Net Working Capital / Total Assets
Internal Measure = Current Assets / Average Daily Operating Costs
Perc๎entage of Debt to Asset Formula = Long Term Liabil๎ities โ Total Assets x 100%
Debt to Equity Ratio Formula = Total Liabil๎ities โ Tota l Equity
Long Term Solvency or Financial Leverage Ratios
Total Debt Ratio = (Total Assets โ Total Equity) / Total Assets
Debt to Equity Ratio = Total Debt / Total Equity
Equity Multip๎lier = Total Assets / Total Equity
Long Term Debt Ratio = Long Term Debt / (Long Term Debt + Total Equity )
Times Interest Earned = Earnings before Interest & Taxes / Interest
Cash Coverage Ratio = (Earnings before Interest & Taxes + Deprec๎iat ion) / Interest
Asset Use or Turnover Ratios
Inve๎ntory Turnover = Cost of Goods So ld / Inventory
Daysโ Sales in Invent๎ory = 365 days / Inventory Turnover
Rece๎ivables Turnover = Sales / Accounts Receivable
Daysโ Sales in Receiv๎ables = 365 days / Receiv๎ables Turnover
Net Working Capital (NWC) Turnover = Sales / Net Working Ca pital
Fixed Asset Turnover = Sales / N et Fixed Assets
Total Asset Turnover = Sales / Total Assets
Profit๎ability Ratios
Profit Margin = Net Income / Sales
Return on Assets (ROA) = Net Income / Total Assets
Return on Equity (ROE) = Net Income / Total Equity
ROE = (Net Income / Sales) x (Sales / Assets) x (Assets / Equity)
Market Value Ratios
Price to Earnings Ratio = Price per Share / E arnings per Share
Mark๎et-๎to-Book Ratio = Market Value p er Share / Book Value per Share
Cash Flow Ratios
Cash Flow Solvency Ratio Formula = Actual Cash Flow from Operations โ Total Liabil๎ities
Cash Flow Margin Ratio Formula = Actual Cash Flow from O perations โ Revenues from Sales
Cash flow ROA Ratio Formula = Actual Cash Flow from Operations โ Average Total A ssets
By David Pollack (Davidp ol)
cheatography.com/davidpol/
www.adldata.com
Published 3rd July, 2015.
Last updated 3rd July, 2015.
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