University:
University of Maryland Global Campus
Course:
MGMT 640 | Financial Decision Making for Managers
Academic year:

2024
Views:

449

Pages:

1
Author:

Janell C.

Liquidity Ratios Current ratio = Current assets / Current liabilities Quick ratio = (Current assets - Inventory) / Current liabilities Inventory turnover = Cost of goods sold / Inventory Day's sales in inventory = 365 days / Inventory turnover Efficiency Ratios Accounts receivable turnover = Net sales / Accounts receivable Day's sales outstanding = 365 days / Accounts receivable turnover Total asset turnover = Net sales / Total assets Fixed asset turnover = Net sales / Net fixed assets Leverage Ratios Total debt ratio = Total debt / Total assets Debt-to-equity ratio = Total debt / Total equity Equity multiplier = Total assets / Total equity Times interest earned = EBIT / Interest expense Cash coverage = EBITDA / Interest expense Profitability Ratios Gross profit margin = (Net sales - Cost of goods sold) / Net sales Operating profit margin = EBIT / Net sales Net profit margin = Net income / Net sales EBIT return on assets (EROA) = EBIT / Total assets Return on assets (ROA) = Net income / Total assets Return on equity (ROE) = Net income / Total equity Market Value Indicators Earnings per share = Net income / Shares outstanding Price-earnings ratio = Price per share / Earnings per share Visual Elements: A table with four columns: Description, Formula, Liquidity Ratios, Efficiency Ratios, Leverage Ratios, and Profitability Ratios. Textual content describing each ratio and its formula. Horizontal and vertical lines separating the table into rows and columns.

Week 3: Key Equations

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