1.

Liquidity Ratios
2. Profitability Ratios
3. Activity Ratios
4. Leverage Ratios
5. Other Ratios
1. Liquidity Ratios
Current ratio Current assets Times
Current liabilities
Quick (acid test) ratio Current asset Inventory Times
Current liabilities
Inventory to Working Capital Inventory Times
Current assets Current liabilities
Cash ratio Cash + Cash equivalents Times
Current liabilities
2. Profitability Ratios
Net profit margin Net profit after taxes Percentage
Net sales
Gross profit margin Sales Cost of goods sold Percentage
Net sales
Return on investment (ROI) Net profit after taxes Percentage
Financial Ratio
Total assets
Return on equity (ROE) Net profit after taxes Percentage
shareholders' equity
Earnings per share (EPS) Net profit after taxes Dollar Per Share
Preferred stock dividends
Average number of
common shares
3. Activity Ratios
Inventory turnover Net sales Times
Inventory
Days of inventory Inventory Days
Cost of goods sold / 365
Net working capital turnover Net sales Times
Net working capital
Asset turnover Sales Times
Total assets
Fixed asset turnover Sales Times
Fixed assets
Average collection period Accounts receivable Days
Sales for year / 365
Accounts receivable turnover Annual credit sales Decimal
Accounts receivable
Accounts payable period Accounts payable Days
Cost of Sales for year / 365
Days of cash Cash Days
Net sales for year / 365
4. Leverage Ratios
Debt to asset ratio Total debt Percentage
Total assets
Debt to equity ratio (leverage) Total debt Percentage
Shareholders' equity
Long-term debt to capital structure Longterm debt Percentage
Shareholders' equity
Times interest earned Profit before taxes + Times
Interest charges
Interest charges
Coverage of fixed charges Profit before taxes + Times
Interest charges +
Lease charges
Interest charges +
Lease obligations
Current liabilities to equity Current liabilities Percentage
Shareholders' equity
5. Other Ratios
Price/earnings ratio Market price per share Times
Earnings per share
Dividend payout ratio Annual dividends per share Percentage
Annual earnings per share
Dividend Yeild on Common Stock Annual dividends per share Percentage
Current market price per share
A short-term indicator of the companys Each pound of current liabilities is covered how many times by current assets
ability to pay its short-term liabilities (2-4)
from short-term assets; how
much of current assets are available to
cover each dollar of current liabilities.
Measures the companys ability to pay
off its short-term obligations from
current assets, excluding inventories.
A measure of inventory balance;
measures the extent to which the
cushion of excess current assets over
current liabilities may be threatened
by unfavorable changes in inventory.
Measures the extent to which the
companys capital is in cash or cash
equivalents; shows how much of the
current obligations can be paid from
cash or near-cash assets.
Shows how much after-tax profits are
generated by each dollar of sales.
Indicates the total margin available to
cover other expenses beyond cost of
goods sold, and still yield a profit.
Measures the rate of return on the total
assets utilized in the company; a measure
of managements efficiency, it shows
the return on all the assets under its control
regardless of source of financing.
Measures the rate of return on the
book value of shareholkders total
investment in the company.
Shows the after-tax earnings generated
for each share of common stock.
Measures the number of times that
average inventory of finished goods
was turned over or sold during a
period of time, usually a year.
Measures the number of one days
worth of inventory that a company
has on hand at any given time.
Measures how effectively the net working
capital is used to generate sales.
Measures the utilization of all the companys
assets; measures how many sales
are generated by each dollar of assets.
Measures the utilization of the companys
fixed assets (i.e., plant and equipment);
measures how many sales are
generated by each dollar of fixed assets.
Indicates the average length of time in
days that a company must wait to collect
a sale after making it; may be
compared to the credit terms offered
by the company to its customers.
Indicates the number of times that
accounts receivable are cycled during
the period (usually a year).
Indicates the average length of time in
days that the company takes to pay its
credit purchases.
Indicates the number of days of cash
on hand, at present sales levels.
Measures the extent to which borrowed
funds have been used to
finance the companys assets.
Measures the funds provided by creditors
versus the funds provided by
owners.
Measures the long-term component
of capital structure.
Indicates the ability of the company
to meet its annual interest costs.
A measure of the companys ability to
meet all of its fixed-charge
obligations.
Measures the short-term financing
portion versus that provided by owners.
Shows the current markets evaluation
of a stock, based on its earnings;
shows how much the investor is willing
to pay for each dollar of earnings.
Indicates the percentage of profit that
is paid out as dividends.
Indicates the dividend rate of return
to common shareholders at the current
Each pound of current liabilities is covered how many times by current assets
1. Income Statement
2005 2006
Sales 20
Cost of Goods Sold -3
Gross Profit 0 17
Marketing & Sales Expenses -1
General & Administrative Expenses -1
EBITDA 0 15
Depreciation -2
Amortization
EBIT 0 13
Interest Expense
Net Operating Profit After Interest 0 13
Interest Income 8
Investment Income 12
Provision for Doubtful Receivables
Provisions
Foreign Exchange Gain/Loss
Other Bank Charges -3
Other Income (Expenses)
Net Profit Before Taxes 0 30
Tax Provision -5
Net Profit After Taxes 0 25
2.Statement of Changes In Shareholder`s Equity
2005 2006
Opening Balance 0 25
Net Profit for the Year 0 25
Shareholder Divideneds
Ending Balance 0 50
Number Of Outstanding Shares
Market Price
Divideneds
3.Statement of Balance Sheet
2005 2006
Assets
Current Assets
Cash 10
Short-Term Investment 5
Account Receivable 12
Inventory 13
Prepaid Expenses 4
Other Current Asset 6
Total Current Assets 0 50
Property & Equipment 25
Accumlated Deprecition -5
Net Fixed Assets 0 20
Long Term Investments 10
Projects Under Construction 5
Other Non-Current Assets 15
Total Non-Current Assets 0 50
Total Assets 0 100
2005 2006
Liabilities
Current Liabilities
Bank Short-Term Borrowings 20
CPLTD 15
Accounts & Notes Payable
Accrued Expenses 5
Other Current Liabilities
Total Current Liabilities 0 40
Long Term Debt 10
Other Long Term Liabilities
Total Liabilities 0 50
Owners' Equity
Paid-in Capital 25
Legal Reserves
Other Reserves
Retained Earnings(Last year)
Profit For The Period 0 25
Total Equity 0 50
Total Liabilities & Equity 0 100
Check 0 0
4.Ratio Analysis
2005 2006
1. Liquidity Ratios
Current ratio #DIV/0! 1.25
Quick (acid test) ratio #DIV/0! 0.925
Inventory to Working Capital #DIV/0! 1.3
Cash ratio #DIV/0! 0.25
2. Profitability Ratios
Net profit margin #DIV/0! 1.25
Gross profit margin #DIV/0! 0.85
Return on investment (ROI) #DIV/0! 0.25
Return on equity (ROE) #DIV/0! 0.5
Earnings per share (EPS) #DIV/0! #DIV/0!
3. Activity Ratios
Inventory turnover #DIV/0! 1.5384615
Days of inventory #DIV/0! 1581.6667
Net working capital turnover #DIV/0! 2
Asset turnover #DIV/0! 0.2
Fixed asset turnover #DIV/0! 1
Average collection period #DIV/0! 219
Accounts receivable turnover #DIV/0! 1.6666667
Accounts payable period #DIV/0! 0
Days of cash #DIV/0! 1800.6667
4. Leverage Ratios
Debt to asset ratio #DIV/0! 0.5
Debt to equity ratio #DIV/0! 1
Long-term debt to capital structure #DIV/0! 0.2
Times interest earned #DIV/0! #DIV/0!
Coverage of fixed charges N/A N/A
Current liabilities to equity #DIV/0! 0.8
5. Other Ratios
Price/earnings ratio #DIV/0! #DIV/0!
Dividend payout ratio #DIV/0! 0
Retention rate #DIV/0! 1
Growth Rate #DIV/0! 0.5
2007 2008
0 0
0 0
0 0
0 0
0 0
0 0
2007 2008
0 0
0 0
0 0
2007 2008
0 0
0 0
0 0
0 0
2007 2008
0 0
0 0
0 0
0 0
0 0
0 0
2007 2008
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