Finance 2
explain turnover rate
determine how long it takes to sell goods that the company spent upfront to acquire annual sales / total assets
What is the formula of dividend yield?
dividend per share / market share price at the beginning of year
what is the purpose of Activity ratios? And what are the types
how efficiently the company uses its resources - average collection period - average inventory period - turnover rate
explain average inventory period
how long it takes for company to sell their inventory inventory level / Total COGS *365
What is the purpose of EPS
indicated how much money a company makes for each share net profit / total outstanding shares
what is another word for net earnings and what does it mean?
net income, profit after tax and interest
what is the purpose of profitability ratios? And what are the types
the yield of sources of funds -ROE -ROD -ROI
Formula of Debt to Equity ratio
total debt / total equity
Formula for Debt ratio
total debt / total investment
What is the formula of total yield?
(dividend per share + current market price) / market price at the beginning of year
Formula of Times Interest Earned ratio
EBIT / Total Interest Expenses
What is the purpose of the market-to-book ratio? and how to calculate the book value
Helps company compare if its assets value is comparable to the market value of its stock Market value / book value book value: (total equity - preferred stock) / total outstanding shares
what is the purpose of leverage ratios? And what are the types
How heavily the company is financed by debt - Debt Ratio - Debt to Equity Ratio - Times Interest Earned Ratio
What is the purpose and formula of payout ratio?
How much of the earnings is going to be paid out dividends / net income
What is dividend cover and its formula?
It's the opposite of the payout ratio net income / dividend
What are the formula of ROE
Net income / Total Equity the net income : revenue - all expenses (including tax and interest)
What is the formula for ROI?
Net income/ Total Investment
What is the formula and purpose of P/E ratio?
Price per earning market share price / EPS
what is the purpose of liquidity ratios? And what are the types
To measure the ability of company to meet short-term obligations - Current Ratio - Quick Ratio - Net Working Capital
What is the formula for ROD? and purpose?
What debtors receive for lending their money interest expense / total debt
what is the purpose of Valuation ratios? And what are the types
analysis the market value performance of a company - EPS - P/E ratio - Dividend Yield - Total Yield - Payout Ratio - Dividend Cover - Market-to-Book ratio
explain average collection period
average time it takes for a company to get their receivables receivables / annual sales* 365
