Compilation S. 1.

Ratio Return on Sales Use/ Interpretation Profitability Ratios Net Income Revenue (or Sales) (average Reflects profitability. of opening and closing balance) Net Income Book Value of Average Shareholders Equity (average of opening and closing balance) Net Income Average Total Assets (Net Income Preferred Stock Dividend) (Average No. of Common Shares Outstanding) Current Price of the Stock EPS figure Sales Revenue Average Total Assets Reflects profitability. Ratio computed to measure the profitable use of a businesss resources An appropriate means of measuring managements efficiency in using company resources A figure that must be reported by corporations that have their stock publicly traded P/E ratio is used to help predict future stock prices based on anticipated EPS figures It simply indicates managements efficiency at generating sales. Formula

2.

Return on Equity (Higher the better)

3. 4.

Return on Assets (Higher the better) (Basic) EPS (Earnings per share) Price Earnings Ratio (P/E Ratio) Total Asset Turnover (Higher the better)

5. 6. 7. 8.

Inventory Turnover Ratio (Lower the better) Days to Sell Inventory (Lower the better)

Inventory Cost of Goods Sold Average Inventory

9.

365 Days Inventory Turnover Accounts Receivable (Gross)1 Accounts Receivable Sales per The result is in __ days. day It is a measure of the speed or slowness of cash collections. Total (Credit) Sales 365 Use credit sales figures if available else use sales figures. If sales figure also not given but net revenue figure given then use that.

10. Age of Receivables (Smaller the better.) 11. Sales per Day

12. Accounts Turnover Ratio

or

Receivable Turnover

Sales Average Net Accounts Receivable

Average Accounts Receivable = (Opening Net A/ R + Closing Net A/ R) 2 It is a measure of the speed or slowness of cash collections.

(Higher the better) 13. Days to Collect Accounts Receivable (Lower or smaller the better) 14. Fixed asset turnover (Higher the better) 15. Current Ratio (Higher the better)

365 days Accounts Receivable Turnover Ratio

Fixed Assets Net Sales Average Net Fixed Assets Indicates the efficiency by which a company uses its property and equipment to generate sales revenues Liquidity Ratios Current Assets Current Liabilities Reflects a companys ability to pay its debts and whether it has enough monetary resources still available to generate profits in the near future. Indication of short-term liquidity and profitability.

16. Working Capital (Higher the better)

Current Assets Current Liabilities

Reflects a companys ability to pay its debts and whether it has enough monetary resources still available to generate profits in the near future. Indication of short-term liquidity and profitability.

17. Quick Ratio (Higher the better) 18. Proportion of Debt that is Current

(Current Assets Inventory OR Cash + Short Term Investments + Net A/R) Current Liabilities Debt due in 1 year Total Debt

Unless otherwise specified.

19. Common Size Long Term Debt 20. Common Size Total Debt 21. Leverage Ratio

Liability Ratios (Long Term Debt Total Assets) x 100 (Total Debt Total Assets) x 100 Total Liability Equity OR Long Term Debt Equity OR Total Debt Equity EBIT Interest Expense OR

22. Times Interest Earned

EBIT = Earnings Before Interest and Taxes EBITDA = Earnings Before Interest, Taxes, Depreciation & Amortisation

23. Cash Cycle (Lower is good & ve is better) 24. Accounts Receivable Turnover or A/R Turnover Ratio (Higher the better) 25. Days to Collect Accounts Receivable (Lower or smaller the better) 26. Days Inventory Outstanding 27. AP Turnover 28. Days to Pay A/P

EBITDA Interest Expense CASHFLOW STATEMENT RELATED RATIOS Days to Collect A/R + Days Inventory Outstanding Days to Pay A/P

Sales Average Net Accounts Receivable

Average Accounts Receivable = (Opening Net A/ R + Closing Net A/ R) 2 It is a measure of the speed or slowness of cash collections.

365 days Accounts Receivable Turnover Ratio

(Inventory COGS) 365 COGS or Purchases Average A/P 365 A/P Turnover