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FINA253 Formulas

The document lists various financial formulas used for assessing liquidity, profitability, and leverage. Key ratios include Current Ratio, Quick Ratio, and Return on Equity (ROE), among others. It also provides formulas for calculating future and present value in finance.

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mysam2717
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4 views1 page

FINA253 Formulas

The document lists various financial formulas used for assessing liquidity, profitability, and leverage. Key ratios include Current Ratio, Quick Ratio, and Return on Equity (ROE), among others. It also provides formulas for calculating future and present value in finance.

Uploaded by

mysam2717
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Formulas:

• Current Ratio = CA / CL
• Quick Ratio = (CA – Inventory) / CL
• Cash Ratio = Cash / CL
• NWC to Total Assets = NWC / TA
• NWC= CA-CL
• Interval Measure = CA / average daily operating costs
• Average daily operating cost= (cost of goods sold + expenses)/365
• Total Debt Ratio = (TA – TE) / TA
• Debt/Equity = TD / TE
• TD = T liability &equity - TE
• Equity Multiplier = TA / TE = 1 + D/E
• Long-term debt ratio = LTD / (LTD + TE)
• Times Interest Earned = EBIT / Interest
• Cash Coverage = (EBIT + Depreciation) / Interest
• Inventory Turnover = Cost of Goods Sold / Inventory
• Days’ Sales in Inventory = 365 / Inventory Turnover
• Receivables Turnover = Sales / Accounts Receivable
• Days’ Sales in Receivables = 365 / Receivables Turnover
• Total Asset Turnover = Sales / Total Assets
• NWC Turnover = Sales / NWC
• Fixed Asset Turnover = Sales / NFA
• Profit Margin = Net Income / Sales
• Return on Assets (ROA) = Net Income / Total Assets
• Return on Equity (ROE) = Net Income / Total Equity
• DU Pont ROE = PM * TAT * EM
• 𝑭𝑽 = 𝑷𝑽 × (𝟏 + 𝒓)𝒕
𝑭𝑽
• 𝑷𝑽 =
(𝟏&𝒓)𝒕
𝑭𝑽
• 𝒓 = (𝑷𝑽)𝟏/𝒕 − 𝟏

• DU Pont ROE = PM * TAT * EM

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