Financial Acc. formulas

• Gross profit margin = Gross profit / Sales revenue x 100
• What is the fundamental equation?

  assets = liabilities - owner's equity
• Net working capital = current assets - current liabilities
• BV of equity = BV assets - BV liabilities
• MV of equity = price per share x shares outstanding
• market-to-book ratio = mkt cap/equity
• debt-eqtuity ratio = total liabilities/total equity
• Enterprise value = Mkt cap + debt - cash
• current ratio = current assets/current liabilities
• quick ratio = (current assets - inventory)/current liabilities
• cash ratio = cash/current liabilities
• profit = revenues - expenses
• gross profit = revenue - cost of goods sold
• operating profit = gross profit - operating expenses
• EBIT = operating profit - other income
• Pretax income = EBIT - interest
• Net income = pretax income - tax
• Earnings per share = net income/shares outstanding
• Gross profit margin = gross profit/sales x 100
• Operating profit margin = operating profit / sales x 100
• Net profit margin = net income/sales x 100
• ROE = net income/equity
• Return on assets (ROA) = net income/total assets
• Account Receivable days = average acc receivable/average daily sales
• Inventory turnover = cost of goods sold/inventory
• Asset turnover = sales/total assets
• Interest coverage ratio = EBIT/interest expense
• Price-Earnings ratio (P/E) = mkt cap/net income
• Operating activity (CS) = net income + depreciation and amortization + cash effect of changes in acc receivable, payable and inventory
• In which accounts are increases decreased (CF)?

  accounts receivable and inventory
• In which accounts are increases added?

  accounts payable
• Acc receivable (operating activities in CF): deduct the increase
• Acc payable (operating activities in CF): add the increase
• Inventory in operating activities (CF) : deduct the increase
• Investing activities (CS) = cash from operating activities - capital expenditure +/- buying or selling marketable securities
• Financing activities (CS) = cash from investing activities - peyment of dividends + changes in borrowing
• payout ratio = dividends/net income
• retained earnings = net income - dividends
• ROE (Dupont Identity) = ROA x equity multiplier
• Equity multiplier = total assets /total equity