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FS Analysis Formulas | PDF | Dividend | Price–Earnings Ratio
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FS Analysis Formulas

This document defines various financial analysis formulas used to calculate liquidity, asset utilization, solvency, profitability, and market value ratios. It provides the formulas to calculate the current ratio, quick/acid test ratio, accounts receivable turnover, average collection period, inventory turnover, average age of inventory, operating cycle, total assets turnover, debt ratio, debt-equity ratio, times interest earned ratio, gross profit margin, profit margin, return on assets, return on ordinary equity, earnings per share, price earnings ratio, book value per share, price-book ratio, dividend yield, and dividend payout.

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Maryrose Sumulong
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87 views2 pages

FS Analysis Formulas

This document defines various financial analysis formulas used to calculate liquidity, asset utilization, solvency, profitability, and market value ratios. It provides the formulas to calculate the current ratio, quick/acid test ratio, accounts receivable turnover, average collection period, inventory turnover, average age of inventory, operating cycle, total assets turnover, debt ratio, debt-equity ratio, times interest earned ratio, gross profit margin, profit margin, return on assets, return on ordinary equity, earnings per share, price earnings ratio, book value per share, price-book ratio, dividend yield, and dividend payout.

Uploaded by

Maryrose Sumulong
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
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FS Analysis Formulas from Baysa and Lupisan Textbook

LIQUIDITY RATIOS
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠
Current ratio =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

𝐶𝑎𝑠ℎ+𝑀𝑎𝑟𝑘𝑒𝑡𝑎𝑏𝑙𝑒 𝑆𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠
Quick/Acid test ratio =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

ASSET UTILIZATION (ACTIVITY) RATIOS


𝑁𝑒𝑡 𝐶𝑟𝑒𝑑𝑖𝑡 𝑆𝑎𝑙𝑒𝑠
Accounts Receivable Turnover (ARTO) =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐴𝑐𝑐𝑜𝑢𝑛𝑡𝑠 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒

365 𝑑𝑎𝑦𝑠
Average collection period (ACP) =
𝐴𝑅𝑇𝑂

𝐶𝑜𝑠𝑡 𝑜𝑓 𝐺𝑜𝑜𝑑𝑠 𝑆𝑜𝑙𝑑


Inventory Turnover =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦

365 𝑑𝑎𝑦𝑠
Average age of Inventory (AAI) =
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Operating Cycle = ACP+AAI

𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠
Total Assets Turnover =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠

SOLVENCY (LEVERAGE & DEBT SERVICE) RATIOS


𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
Debt Ratio =
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠

𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
Debt-Equity Ratio =
𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟 ′ 𝑠 𝐸𝑞𝑢𝑖𝑡𝑦

𝐸𝐵𝐼𝑇
Times Interest Earned Ratio (TIER) =
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐸𝑥𝑝𝑒𝑛𝑠𝑒
PROFITABILITY RATIOS
𝐺𝑟𝑜𝑠𝑠 𝑝𝑟𝑜𝑓𝑖𝑡
Gross profit margin =
𝑁𝑒𝑡 𝑠𝑎𝑙𝑒𝑠

𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
Profit margin =
𝑁𝑒𝑡 𝑠𝑎𝑙𝑒𝑠

𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
Return on Assets =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠

𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑡𝑜 𝑠ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠


Return on Ordinary Equity =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑆𝐻𝐸

MARKET VALUE RATIOS


𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒−𝑃𝑟𝑒𝑓𝑒𝑟𝑒𝑛𝑐𝑒 𝑆ℎ𝑎𝑟𝑒 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑
EPS =
𝑂𝑟𝑑𝑖𝑛𝑎𝑟𝑦 𝑆ℎ𝑎𝑟𝑒𝑠 𝑂𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔

𝑀𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒


Price Earnings Ratio (PE Ratio) =
𝐸𝑃𝑆

𝑇𝑜𝑡𝑎𝑙 𝑆𝐻𝐸−𝑃𝑟𝑒𝑓𝑒𝑟𝑒𝑛𝑐𝑒 𝑆ℎ𝑎𝑟𝑒 𝐶𝑎𝑝𝑖𝑡𝑎𝑙


Book Value per Share =
𝑂𝑟𝑑𝑖𝑛𝑎𝑟𝑦 𝑠ℎ𝑎𝑟𝑒𝑠 𝑜𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔

𝑀𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒


Price-book Ratio =
𝐵𝑜𝑜𝑘 𝑉𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒

𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒


Dividend Yield =
𝑀𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒

𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒


Dividend Payout =
𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒

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