University:
Fort Hays State University
Course:
ACCT 412 | Auditing
Academic year:

2021
Views:

204

Pages:

3
Author:

Allioniy9p

FINANCIAL ACCOUNTING RATIOS Non-Operating Profit After Tax NOPAT = Operating Revenues – Operating Expenses NOPAT = EBIT – Operating Tax Expense (Tax expense + Tax Shield (Pre-tax NNE x tax rate)) Net operating profit before tax (NOPBT) - Tax on operating profit Net Non-Operating Expenses NNE = Pre-Tax NNE x (1-Tax rate) +/- Post-Tax NNE NNE = NOPAT – Consolidated Income Non-operating Assets NOA = Operating Assets – Operating Liabilities Net Non-Operating Operations NNO = Non-Operating Obligations – Non-Operating Assets NNO = NOA – Equity Return on Equity ROE = Net Income . Ave. Shareholders Equity ROE = Net Income (of controlling interest) . Ave. Shareholders Equity (of controlling interest) ROE = Operating Return + Non-operating Return Return on Net Operating Assets RNOA = Net Operating Assets after Tax (NOPAT) Ave Net Operating Assets (NOA) Tax on Operating Profit Tax expense + (Pre-tax net non-operating expense (NNOE) x Statutory tax rate) Net Operating Assets Operating assets - Operating liabilities Net Operating Profit Margin NOPM = Net operating profit after tax Revenues Net Operating Asset Turnover NOAT = Revenues Average net operating assets (NOA) Financial Leverage FLev = Average NNO Average total stockholders’ equity Net Non-operating Expense Percent NNEP = Net non-operating expense (NNE) . Average net non-operating obligations (NNO) Spread Return net of operating assets (RNOA) - Net non-operating expense percent (NNEP) NOA Net Operating Assets Net non-operating obligations (NNO) + Stockholders equity (EQ) Non-operating Return NOR = Financial leverage (FLev) x Spread Return on Common Equity ROCE = (Net income - Preferred dividends) . (Average stockholders' equity - Average preferred equity) Current Ratio Current assets / Current liabilities Quick Ratio (Cash + Marketable Securities + Accounts Receivable) / Current liabilities Net operating working capital (NOWC) Current operating assets - Current operating liabilities Liabilities to Equity Ratio Total liabilities / Stockholders equity Times Interest Earned Earnings before interest and taxes / Interest expense Vertical Analysis Expresses financial statements in ration form. Specifically it is routine to express income statement (IS) items as % of sales, and balance sheet (BS) items as % of total assets. Horizontal Analysis The scrutiny of financial data across time. What are Financial Ratios?