Financial Statement Analysis

Liquidity

Description
Current Ratio Current Assets/Current Liability
Quick Ratio (Current Assets - Inventory)/(Current Liability)
Cash Ratio Cash & Cash Equivalents/Current Liability
Defensive Interval Ratio ((Cash + Marketable Securities + Accounts Receivable)/(Cost of Go
Accounts Payable Turnover Cost of Goods Sold/Average Inventory
Payable Days (Accounts Payable/Cost of Goods Sold)*365
Net Debt (Short-Term Debt + Long-Term Debt) - Cash & Cash Equivalents

Efficiency

Description
Cash Returns on Asset Ratio Cash Flow From Operations/Total Assets
Capital Expenditure Ratio Cash Flow From Operations/Capital Expenditures
Operating Cycle Inventory Days + Receivable Days
Inventory Turnover Net Sales/Average Inventory
Accounts Receivable Turnover Net Sales/Average Accounts Receivable
Capital Turnover Net Sales/Average Shareholder's Equity
Net Working Capital Turnover Net Sales/Net Working Capital
Inventory Days (Inventory/Cost of Goods Sold)*365
Receivable Days (Accounts Receivables/Net Sales)*365
Cash Conversion Cycle Receivable Days + Inventory Days - Payable Days
Degree of Operating Leverage Percentage Change in EBIT/Percentage Change in Sales
Overhead Ratio Operating Expenses/(Operating Income + Taxable Net Interest Inco
Contribution Margin Ratio (Net Sales - Total Variable Expenses)/(Net Sales)

Coverage

Description
Cash Flow to Debt Ratio
Interest Coverage Ratio
Debt Service Coverage Ratio
Asset Coverage Ratio
Cash Coverage Ratio
Altman Z Score (publicly traded companies)
Cash Flow From Operations/Total Outstanding Debt
EBITDA/Interest Expense
EBITDA/Total Debt
(Fixed Asset - Short-Term Liabilities)/Total Debt
(EBIT + Non Cash Expense)/Interest Expense
(1.2*(Working Capital/Total Assets))+(1.4*(Retained Earnings/Total

Leverage

Description
Long-Term Debt to Equity Ratio Long Term Debt/Total Equity
Total Debt to Equity Ratio Total Debt/Total Equity
Debt Ratio Total Debt/Total Assets
Equity Multiplier Total Assets/Total Equity
Equity Ratio Shareholder's Equity/Total Assets
Capital Gearing Ratio Common Stockholders' Equity/Fixed Interest Bearing Funds

Profitability
 Description
Gross Profit Margin ((Revenue - Cost of Goods Sold)/Revenue)*100%
Net Profit Margin (Profit After Tax/Revenue)*100%
EBITDA Margin (Earnings Before Interest, Taxes & Depreciation & Amortization/Rev
Method 1: ((Total Sales - Cost of Goods Sold - Operating Expenses
EBIT Margin
Method 2: (Net Income + Interest Expense + Taxes)/Total Sales*10
Return on Invested Capital (Net Operating Profit After Tax)/(Debt + Equity)
Return on Capital Employed EBIT/(Total Assets - Current Liabilities)
Return on Sales (Net Income/Net Sales)*100%
Return on Equity (1st Perspective) Net Income/Total Equity
DuPont Return on Equity (2nd Perspective) Profit Margin*Total Asset Turnover*Equity Multiplier
 Formula
t Liability
ntory)/(Current Liability)
nts/Current Liability
ecurities + Accounts Receivable)/(Cost of Goods Sold + Annual Operating Expenses - Noncash Charges)/365))
verage Inventory
st of Goods Sold)*365
ng-Term Debt) - Cash & Cash Equivalents

Formula
ations/Total Assets
ations/Capital Expenditures
eivable Days
entory
counts Receivable
areholder's Equity
g Capital
ods Sold)*365
s/Net Sales)*365
entory Days - Payable Days
EBIT/Percentage Change in Sales
Operating Income + Taxable Net Interest Income)
able Expenses)/(Net Sales)

Formula
ations/Total Outstanding Debt
nse

erm Liabilities)/Total Debt

pense)/Interest Expense
Total Assets))+(1.4*(Retained Earnings/Total Assets))+(3.3*(EBIT/Total Assets))+(.6*(Market Value of Equity/Total Liabilities)

Formula
Equity

s
ty
Total Assets
s' Equity/Fixed Interest Bearing Funds
 Formula
oods Sold)/Revenue)*100%

est, Taxes & Depreciation & Amortization/Revenue)*100%

s - Cost of Goods Sold - Operating Expenses)/Total Sales)*100%
e + Interest Expense + Taxes)/Total Sales*100%
After Tax)/(Debt + Equity)
urrent Liabilities)
s)*100%
y
et Turnover*Equity Multiplier
 Purpose
Measures a company's ability to pay short-term obligations or those due within one year.
Measures a company’s ability to meet its short-term obligations with its most liquid assets.
Measures a company’s capacity to pay off short-term obligations with its cash and cash equivalents.
Measures the number of days that a company can operate without using its noncurrent assets, any long-term as
Measures the speed with which a company pays its suppliers.
Measures the average time that a company takes to pay its bills and invoices to suppliers, vendors or other com
Determins how well a company can pay all of its debts if they were due immediately.

Purpose
Rates actual cash flows to company assets without being affected by income recognition or income measuremen
Assess a company's ability to purchase more assets, and do so without having to issue debt or equity.
Refers to days required required for a business to receive inventory, sell the inventory and collect cash from the
Shows how many times a company has sold and replaced inventory during a given period.
Measures a company's effectiveness in collecting its receivables or money owed by customers.
Measures the proportion of revenue that a company can generate with a given amount of equity.
Measures the company's effectiveness in using its working capital.
Measures the average number of days the company holds its inventory before selling it
Measures the average number of days that it takes a company to collect payment after a sale has been made.
Measures the time it takes for a company to convert its investments in inventory and other resources into cash fl
Quantifies a company's operating risk that is a result of the structure of fixed and variable costs.
Measures the operating costs of doing business compared to the company's income.
Represents the portion of sales that is not consumed by variable costs and so contributes to the coveraged of fix

Purpose
Determines how long it would take a company to repay its debt if it devoted all of its cash flow to debt repayment
Measures a company's ability to make interest payments on its debt in a timely manner.
Measures a company's ability to service its current debt (including its current interest, principle and sinking fund
Measures a company's ability to repay its debt obligations by selling its assets.
Assess the amount of cash available to pay for a borrower's interest expense.
Gauges a publicly traded company's likelihood of bankruptcy.

Purpose
Determine the leverage that a business has taken on.
Measures the riskiness of a company's financial structure.
Determines the proportion of a company's assets that are financed by debt.
Measures the portion of a company's assets that are financed by stockholder's equity.
Measures the amount of assets that are financed by owners' investments.
Analyze the current capital structure of a company
 Purpose
Measures a company's financial health and business model by revealing the amount of money left over from sale
Illustrates how much of each dollar in revenue collected by a company translates into profits.
Provides an investor, business owner or financial professional with a clear view of a company's operating profitab

Assess true business costs of running a company.

Assess a company's efficiency at allocating the capital under its control to profitable investments.
Measures a company's profitability and efficiency with which its capital is used.
Quantifies how much profit is being produced per dollar of sales.
Measures how efficiently a firm can use the money from shareholders to generate profits and grow the company
A tool used to decompose the different drivers of Return on Equity to identify strengths and weaknesses.
 Purpose
pay short-term obligations or those due within one year.
meet its short-term obligations with its most liquid assets.
o pay off short-term obligations with its cash and cash equivalents.
t a company can operate without using its noncurrent assets, any long-term asset or any other financial resources.
company pays its suppliers.
company takes to pay its bills and invoices to suppliers, vendors or other companies.
an pay all of its debts if they were due immediately.

Purpose
ny assets without being affected by income recognition or income measurements.
chase more assets, and do so without having to issue debt or equity.
or a business to receive inventory, sell the inventory and collect cash from the sale of the inventory.
ny has sold and replaced inventory during a given period.
ess in collecting its receivables or money owed by customers.
ue that a company can generate with a given amount of equity.
eness in using its working capital.
days the company holds its inventory before selling it
days that it takes a company to collect payment after a sale has been made.
ompany to convert its investments in inventory and other resources into cash flows from sales.
risk that is a result of the structure of fixed and variable costs.
doing business compared to the company's income.
at is not consumed by variable costs and so contributes to the coveraged of fixed costs.

Purpose
e a company to repay its debt if it devoted all of its cash flow to debt repayment.
make interest payments on its debt in a timely manner.
service its current debt (including its current interest, principle and sinking fund obligations).
epay its debt obligations by selling its assets.
ble to pay for a borrower's interest expense.
y's likelihood of bankruptcy.

Purpose
siness has taken on.
any's financial structure.
mpany's assets that are financed by debt.
ny's assets that are financed by stockholder's equity.
hat are financed by owners' investments.
ure of a company
 Purpose
health and business model by revealing the amount of money left over from sales after deducting COGS.
ar in revenue collected by a company translates into profits.
wner or financial professional with a clear view of a company's operating profitability & cash flow.

ning a company.
allocating the capital under its control to profitable investments.
y and efficiency with which its capital is used.
ng produced per dollar of sales.
an use the money from shareholders to generate profits and grow the company.
erent drivers of Return on Equity to identify strengths and weaknesses.
 Source Explanation
Balance Sheet https://bit.ly/2Lr0fEq
Balance Sheet https://bit.ly/2YatKjV
Balance Sheet https://bit.ly/2GhFTcF
Income Statement, Balance Sheet, Cash Flow Statement https://bit.ly/2XLocNr
Income Statement, Balance Sheet https://bit.ly/2YXt6TV
Income Statement, Balance Sheet https://bit.ly/2xQJk5o
Balance Sheet https://bit.ly/2NX5GNl

Source Explanation
Balance Sheet, Cash Flow Statement
Cash Flow Statement https://bit.ly/2xQK5LM
Income Statement, Balance Sheet https://bit.ly/2GhHJu5
Income Statement, Balance Sheet https://bit.ly/2MK1MFZ
Income Statement, Balance Sheet https://bit.ly/2xRPAdd
Income Statement, Balance Sheet https://bit.ly/2JQP9W0
Income Statement, Balance Sheet https://bit.ly/2XV1SBb
Income Statement, Balance Sheet https://bit.ly/2JC0YAq
Income Statement, Balance Sheet https://bit.ly/2LZnXXQ
Income Statement, Balance Sheet https://bit.ly/2XU9jDK
Income Statement

Source Source
Balance Sheet, Cash Flow Statement
Income Statement, Balance Sheet, Cash Flow Statement
Income Statement, Balance Sheet, Cash Flow Statement
Balance Sheet
Income Statement, Balance Sheet, Cash Flow Statement
Income Statement, Balance Sheet, Yahoo Finance

Source Source
Balance Sheet
Balance Sheet
Balance Sheet
Balance Sheet
Balance Sheet
Balance Sheet
 Source Source
Income Statement
Income Statement
Income Statement, Cash Flow Statement

Income Statement
Income Statement, Balance Sheet
Income Statement, Balance Sheet
Income Statement https://bit.ly/30BDl0D
Income Statement, Balance Sheet
Income Statement, Balance Sheet