RATIOS FOR INVESTING

Liquidity Ratios.

1.Current Ratio.

Is the ratio of current assets to current liabilities

Current ratio=current assets/current liabilities.

2.Quick or Acid Test Ratio.

Quick ratio=cash+marketable securities+receivables/current liabilities.

Asset Management Ratios.

3.Inventory Turnover Ratio.

Inventory Turnover Ratio.= Sales/Inventories.

4.Days Sales Outstanding.

Days Sales Outstanding= Receivables/Avarage sales per day

5.Fixed Asset turnover ratio

Fixed Asset Ratio= Sales/Net Fixed Assets

6.Total Asset turnover ratio

Total Asset Turnover Ratio = Sales/Total Assets

Debt Management Ratios.

7.Debt ratio.

Debt Ratio= Total Liabilities/Total Assets

8.Times Interest Earned ratio.

Times Interest Earned ratio= EBIT/Interest charges.

9.Ability to service debt.

Ability to service debt = EBITDA +Lease payments/Interest +Principle payment +Lease payment

Profitability Ratios.

10.Profit Margin on sales.

Profit Margin on Sales = Net income available to common stockholders/Sales.

11.Basic Earning Power.

Basic Earning Power = Earnings Before Interest and Tax/Total Assets.

12.Return on Assets.

ROA= Net income available to common stockholders/Total Assets.

13.Return on Equity.

ROE= Net income available to common stockholders/common equity.

Market value.

14.Price to Earning ratio

P/E = Price per share/Earnings per share.

15.Price to Cash flow.

P/Cashflow = Price per share/cash flow per share.

16.Market to Book.

M/B=Market price per share/Book value per share.

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