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Financial Analysis Formula Table

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25 views

Financial Analysis Formula Table

Uploaded by

chelseabernabe1018
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Financial statement analysis Formula

1. Horizontal analysis
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑦𝑟.𝑎𝑚𝑡.– 𝑏𝑎𝑠𝑒 𝑦𝑟.𝑎𝑚𝑡.
• % change = 𝑏𝑎𝑠𝑒 𝑦𝑟.𝑎𝑚𝑡.
𝑥 100

2. Vertical analysis
𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑖𝑛𝑑𝑖𝑣𝑖𝑑𝑢𝑎𝑙 𝑖𝑡𝑒𝑚
• % Individual item =
𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑏𝑎𝑠𝑒 𝑖𝑡𝑒𝑚
𝑥 100

Liquidity ratios

3. Current ratio
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡
• Current ratio =
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

4. Quick ratio
𝑐𝑎𝑠ℎ + 𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠
• Quick ratio = 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

5. Receivable turnover
𝑛𝑒𝑡 𝑠𝑎𝑙𝑒𝑠
• Receivable turnover =
𝑎𝑣𝑔.𝑡𝑟𝑎𝑑𝑒 𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠
𝑝𝑟𝑒𝑣. 𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠 + 𝑙𝑎𝑡𝑒𝑠𝑡 𝑟𝑒𝑐𝑖𝑒𝑣𝑎𝑏𝑙𝑒𝑠
• Average receivables = 2
360 𝑑𝑎𝑦𝑠
• AVERAGE COLLECTION PERIOD = 𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟

6. inventory turnover
𝑐𝑜𝑠𝑡 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑠𝑜𝑙𝑑
• Inventory turnover = 𝑎𝑣𝑔. 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
𝑝𝑟𝑒𝑣. 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 + 𝑙𝑎𝑡𝑒𝑠𝑡 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
• Avg. inventory =
2
360 𝑑𝑎𝑦𝑠
• Average sales period = 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟

7. working capital
Working capital = 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠 − 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

Solvency ratios

8. Debt to asset ratio


𝑡𝑜𝑡𝑎𝑙 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
Debt ratio =
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠

9. Equity ratio
𝑡𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦
Equity ratio = 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠

10. Debt to Equity ratio


𝑡𝑜𝑡𝑎𝑙 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
Debt to Equity ratio = 𝑡𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦

Profitability ratios

11. Gross Profit ratio (%)


𝑔𝑟𝑜𝑠𝑠 𝑝𝑟𝑜𝑓𝑖𝑡
Gross Profit ratio = 𝑛𝑒𝑡 𝑠𝑎𝑙𝑒𝑠
𝑥100

12. Operating Profit margin (%)


𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑖𝑛𝑐𝑜𝑚𝑒
Operating Profit margin = 𝑛𝑒𝑡 𝑠𝑎𝑙𝑒𝑠
𝑥100

13. Net Profit margin (%)


𝑛𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
Operating Profit margin = 𝑛𝑒𝑡 𝑠𝑎𝑙𝑒𝑠
𝑥100

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