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Financial Ratios and Metrics: A Comprehensive Guide, Quizzes of Accounting

Definitions and formulas for various financial ratios and metrics, including gross margin ratio, cost ratio, sg&a ratio, ebit margin ratio, profit margin ratio, effective tax rate, net operating profit after tax (nopat), asset turnover, days sales in inventory, days sales outstanding, days payable outstanding, cash conversion cycle, return on assets, return on equity, market capitalization, return on invested capital, current ratio, quick ratio, debt to capital ratio, interest coverage ratio, effective interest rate, market-to-book ratio, free cash flow to equity, percentage fcfe returned, dividend payout ratio, dividend yield, total return to shareholders, cost of equity, and weighted average cost of capital.

Typology: Quizzes

2013/2014

Uploaded on 10/03/2014

nora-osullivan1
nora-osullivan1 🇺🇸

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TERM 1
Gross Margin Ratio
DEFINITION 1
= (Sales - COGS) / Sales,oror= 1 - COGS / Sales
TERM 2
Cost Ratio
DEFINITION 2
=COGS / Salesor1 - Gross Margin Ratio
TERM 3
SG&A Ratio
DEFINITION 3
= SG&A Expense / Sales
TERM 4
EBIT Margin Ratio
DEFINITION 4
= EBIT / Sales
TERM 5
Profit Margin Ratio
DEFINITION 5
= Net Income / Sales
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Gross Margin Ratio

= (Sales - COGS) / Sales,oror= 1 - COGS / Sales

TERM 2

Cost Ratio

DEFINITION 2

=COGS / Salesor1 - Gross Margin Ratio

TERM 3

SG&A Ratio

DEFINITION 3

= SG&A Expense / Sales

TERM 4

EBIT Margin Ratio

DEFINITION 4

= EBIT / Sales

TERM 5

Profit Margin Ratio

DEFINITION 5

= Net Income / Sales

Effective Tax Rate

(ETR)

= Tax Expense / Earnings Before Tax ( or "Pretax Income")

TERM 7

Net Operating Profit After Tax (NOPAT)

DEFINITION 7

= EBIT * (1 - Effective Tax Rate)

TERM 8

Asset Turnover

DEFINITION 8

= Sales / Assets;or= Sales / Average AssetsAsset turnover is

a financial ratio that measures the efficiency of a company's

use of its assets in generating sales revenue or sales income

to the company.

TERM 9

Days Sales in Inventory

DEFINITION 9

365 / (COGS / Inventory)or= 365 / (COGS / Average

Inventory)

TERM 10

Days Sales

Outstanding

DEFINITION 10

= 365 / (Sales / Accounts Receivable)or= 365 / (Sales /

Average Accounts Receivable)

Return on Invested Capital

= NOPAT / (Interest Bearing Debt + Market Capitalization)

TERM 17

Current Ratio

DEFINITION 17

= Current Assets / Current Liabilities

TERM 18

Quick Ratio

DEFINITION 18

= (Cash + Short term Investments + Accounts Receivable) /

Current Liabilities

TERM 19

Debt to Capital Ratio

DEFINITION 19

= Interest Bearing Debt / (Interest Bearing Debt + Owner's

Equity)

TERM 20

Interest Coverage Ratio

DEFINITION 20

= EBIT / Interest ExpenseTimes interest earned or interest

coverage ratio is a measure of a company's ability to honor

its debt payments.

Effective Interest Rate (after-tax)

= Interest Expense / Interest Bearing Debt * (1 - ETR)or=

Interest Expense / Average Interest Bearing Debt * (1 - ETR)

TERM 22

Market-to-Book Ratio

DEFINITION 22

= Market Capitalization / Owner's Equity

TERM 23

Free Cash Flow to Equity

(FCFE)

DEFINITION 23

= Operating Cash Flow - Capital Expenditures + Net Change

in Debt

TERM 24

Percentage FCFE Returned

DEFINITION 24

= (Dividends + Share Repurchases / FCFE

TERM 25

Dividend Payout Ratio

DEFINITION 25

= Dividends / Net Income