Statement of the Assignment Please prepare a comprehensive list of financial ratios as introduced in Chapter 3 of the textbook Write a brief explanation below each financial ratio, e g what does the financial ratio measures or what the significance of it is For example Current Ratio Current Assist Current Liabilities Current ratio measures whether our current assets, if liquidated, are sufficient to pay all of our current liabilities A CR of 1 5, for example, shows that if we were to liquidate all of our current assets, we will be able to cover 1 5x our current liabilities, whereas a CR of 0 5 shows that liquidating our current assets only covers half of our current liabilities FINANCIAL RATIOS I WANT A Write a brief explanation below each financial ratio, e g what does the financial ratio measures or what the significance of it is Short term solvency, or liquidity, measures Current ratio current assets current liabilities Quick ration Current assets inventory current liabilities Other liquidity Ratios Cash ratio Cash Current Liabilities Net Working Capital to Total Assets Net working Capital Total Assets Interval Measure Current assets Average daily operating costs Long term Solvency Measures Total assets total equity total assets Debit equity ratio total debt total equity Equity multiplier total assets total equity Long term debt ratio long term debt long term total equity Tomes interest earned ratio EBIT Interest Cash coverage ratio EBIT Depreciation interest Asser management, Or turnover, measures Inventory turnover Cost of goods sold inventory Receivables Turnover sales accounts receivable NWC turnover sales NWC Fixed asset turnover sales net fixed assets Total asset turnover sales total assets Profitability measures Profit margin Net income sales Return on Assets Net income total assets Return on equity net income total equity Market Value Measures EPS net income Shares outstanding PE price per share earning per share Market to book ratio market value per share book value per share Enterprise value total market value of the stock book value of liabilities cash EBITA Ration enterprise value EBITDA

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Statement of the Assignment : Please prepare a comprehensive list of financial ratios as introduced in Chapter 3 of the textbook. Write a brief explanation

Statement of the Assignment:

Please prepare a comprehensive list of financial ratios as introduced in Chapter 3 of the textbook. Write a brief explanation below each financial ratio, e.g. what does the financial ratio measures or what the significance of it is.

For example:

Current Ratio = Current Assist / Current Liabilities

Current ratio measures whether our current assets, if liquidated, are sufficient to pay all of our current liabilities. A CR of 1.5, for example, shows that if we were to liquidate all of our current assets, we will be able to cover 1.5x our current liabilities, whereas a CR of 0.5 shows that liquidating our current assets only covers half of our current liabilities.

FINANCIAL RATIOS I WANT : A Write a brief explanation below each financial ratio, e.g. what does the financial ratio measures or what the significance of it is.

Short-term solvency, or liquidity, measures

Current ratio = current assets/ current liabilities

Quick ration = Current assets inventory / current liabilities

Other liquidity Ratios

Cash ratio = Cash/ Current Liabilities
Net Working Capital to Total Assets = Net working Capital / Total Assets
Interval Measure= Current assets / Average daily operating costs

Long term Solvency Measures

Total assets total equity / total assets
Debit- equity ratio = total debt / total equity
Equity multiplier = total assets / total equity

Long term debt ratio = long term debt / long term + total equity

Tomes interest earned ratio = EBIT / Interest
Cash coverage ratio= EBIT + Depreciation / interest

Asser management, Or turnover, measures

Inventory turnover = Cost of goods sold / inventory
Receivables Turnover = sales / accounts receivable

NWC turnover= sales / NWC
Fixed asset turnover = sales/ net fixed assets
Total asset turnover = sales/ total assets

Profitability measures

Profit margin = Net income/ sales
Return on Assets= Net income / total assets
Return on equity = net income / total equity

Market Value Measures

EPS = net income/ Shares outstanding
PE= price per share / earning per share
Market to book ratio= market value per share / book value per share
Enterprise value= total market value of the stock + book value of liabilities cash
EBITA Ration= enterprise value/ EBITDA