Mathematic Expression

From Objectif Client Inc
Revision as of 19:59, 19 May 2016 by Nicolas Rollin (talk | contribs) (Created page with "==Ratios== ===Profitability ratios=== Profitability ratios measure the company's use of its assets and control of its expenses to generate an acceptable rate of return :;Gr...")
(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to navigation Jump to search

Ratios

Profitability ratios

Profitability ratios measure the company's use of its assets and control of its expenses to generate an acceptable rate of return

Gross margin, Gross profit margin or Gross Profit Rate[1][2]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Gross Profit}}{\mbox{Net Sales}}}  :::OR :::Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Net Sales -- COGS}}{\mbox{Net Sales}}}
Operating margin, Operating Income Margin, Operating profit margin or Return on sales (ROS)[2][3]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Operating Income}}{\mbox{Net Sales}}}
Note: Operating income is the difference between operating revenues and operating expenses, but it is also sometimes used as a synonym for EBIT and operating profit.[4] This is true if the firm has no non-operating income. (Earnings before interest and taxes / Sales[5][6])
Profit margin, net margin or net profit margin[7]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Net Profit}}{\mbox{Net Sales}}}
Return on equity (ROE)[7]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Net Income}}{\mbox{Average Shareholders Equity}}}
Return on assets (ROA ratio or Du Pont Ratio)[8]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Net Income}}{\mbox{Average Total Assets}}}
Return on assets (ROA)[9]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Net Income}}{\mbox{Total Assets}}}
Return on assets Du Pont (ROA Du Pont)[10]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \left(\frac{\mbox{Net Income}}{\mbox{Net Sales}}\right)\left(\frac{\mbox{Net Sales}}{\mbox{Total Assets}}\right)}
Return on Equity Du Pont (ROE Du Pont)
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \left(\frac{\mbox{Net Income}}{\mbox{Net Sales}}\right)\left(\frac{\mbox{Net Sales}}{\mbox{Average Assets}}\right)\left(\frac{\mbox{Average Assets}}{\mbox{Average Equity}}\right)}
Return on net assets (RONA)
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Net Income}}{\mbox{Fixed Assets + Working Capital}}}
Return on capital (ROC)
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{EBIT(1 − Tax Rate)}}{\mbox{Invested Capital}}}
Risk adjusted return on capital (RAROC)
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Expected Return}}{\mbox{Economic Capital}}}  :::OR :::Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Expected Return}}{\mbox{Value at Risk}}}
Return on capital employed (ROCE)
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{EBIT}}{\mbox{Capital Employed}}}
Note: this is somewhat similar to (ROI), which calculates Net Income per Owner's Equity
Cash flow return on investment (CFROI)
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Cash Flow}}{\mbox{Market Recapitalisation}}}
Efficiency ratio
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Non-Interest expense}}{\mbox{Revenue}}}
Net gearing
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Net debt}}{\mbox{Equity}}}
Basic Earnings Power Ratio[11]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{EBIT}}{\mbox{Total Assets}}}

Liquidity ratios

Liquidity ratios measure the availability of cash to pay debt.

Current ratio (Working Capital Ratio)[12]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Current Assets}}{\mbox{Current Liabilities}}}
Acid-test ratio (Quick ratio)[12]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Current Assets -- (Inventories + Prepayments)}}{\mbox{Current Liabilities}}}
Cash ratio[12]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Cash and Marketable Securities}}{\mbox{Current Liabilities}}}
Operating cash flow ratio
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Operating Cash Flow}}{\mbox{Total Debts}}}

Activity ratios (Efficiency Ratios)

Activity ratios measure the effectiveness of the firm's use of resources.

Average collection period[13]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Accounts Receivable}}{\mbox{Annual Credit Sales ÷ 365 Days}}}
Degree of Operating Leverage (DOL)
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Percent Change in Net Operating Income}}{\mbox{Percent Change in Sales}}}
DSO Ratio.[14]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Accounts Receivable}}{\mbox{Total Annual Sales ÷ 365 Days}}}
Average payment period[13]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Accounts Payable}}{\mbox{Annual Credit Purchases ÷ 365 Days}}}
Asset turnover[15]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Net Sales}}{\mbox{Total Assets}}}
Stock turnover ratio[16][17]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Cost of Goods Sold}}{\mbox{Average Inventory}}}
Receivables Turnover Ratio[18]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Net Credit Sales}}{\mbox{Average Net Receivables}}}
Inventory conversion ratio[19]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{365 Days}}{\mbox{Inventory Turnover}}}
Inventory conversion period (essentially same thing as above)
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \left (\frac{\mbox{Inventory}}{\mbox{Cost of Goods Sold}}\right)\mbox{365 Days}}
Receivables conversion period
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \left (\frac{\mbox{Receivables}}{\mbox{Net Sales}}\right)\mbox{365 Days}}
Payables conversion period
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \left (\frac{\mbox{Accounts Payables}}{\mbox{Purchases}}\right)\mbox{365 Days}}
Cash Conversion Cycle
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \mbox{Inventory Conversion Period + Receivables Conversion Period - Payables Conversion Period}}

Debt ratios (leveraging ratios)

Debt ratios quantify the firm's ability to repay long-term debt. Debt ratios measure financial leverage.

Debt ratio[20]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Total Liabilities}}{\mbox{Total Assets}}}
Debt to equity ratio[21]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Long-term Debt + Value of Leases}}{\mbox{Average Shareholders Equity}}}
Long-term Debt to equity (LT Debt to Equity)[21]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Long-term Debt}}{\mbox{Average Shareholders Equity}}}
Times interest earned ratio (Interest Coverage Ratio)[21]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{EBIT}}{\mbox{Annual Interest Expense}}}
OR
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Net Income}}{\mbox{Annual Interest Expense}}}
Debt service coverage ratio
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Net Operating Income}}{\mbox{Total Debt Service}}}

Market ratios

Market ratios measure investor response to owning a company's stock and also the cost of issuing stock. These are concerned with the return on investment for shareholders, and with the relationship between return and the value of an investment in company’s shares.

Earnings per share (EPS)[22]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Net Earnings}}{\mbox{Number of Shares}}}
Payout ratio[22][23]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Dividends}}{\mbox{Earnings}}}
OR
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Dividends}}{\mbox{EPS}}}
Dividend cover (the inverse of Payout Ratio)
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Earnings per Share}}{\mbox{Dividend per Share}}}
P/E ratio
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Market Price per Share}}{\mbox{Diluted EPS}}}
Dividend yield
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Dividend}}{\mbox{Current Market Price}}}
Cash flow ratio or Price/cash flow ratio[24]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Market Price per Share}}{\mbox{Present Value of Cash Flow per Share}}}
Price to book value ratio (P/B or PBV)[24]
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Market Price per Share}}{\mbox{Balance Sheet Price per Share}}}
Price/sales ratio
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Market Price per Share}}{\mbox{Gross Sales}}}
PEG ratio
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Price per Earnings}}{\mbox{Annual EPS Growth}}}

Other Market Ratios

EV/EBITDA
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Enterprise Value}}{\mbox{EBITDA}}}
EV/Sales
Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \frac{\mbox{Enterprise Value}}{\mbox{Net Sales}}}
Cost/Income ratio

Sector-specific ratios

EV/capacity
EV/output

Capital budgeting ratios

Template:Main In addition to assisting management and owners in diagnosing the financial health of their company, ratios can also help managers make decisions about investments or projects that the company is considering to take, such as acquisitions, or expansion.

Many formal methods are used in capital budgeting, including the techniques such as

  1. ↑ Williams, P. 265.
  2. ↑ 2.0 2.1 Williams, p. 1094.
  3. ↑ Template:Cite book
  4. ↑ Operating income definition
  5. ↑ Groppelli, p. 443.
  6. ↑ Template:Cite book
  7. ↑ 7.0 7.1 Groppelli, p. 444.
  8. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named Groppelli, p. 445
  9. ↑ Professor Cram. "Ratios of Profitability: Return on Assets" College-Cram.com. 14 May 2008
  10. ↑ Professor Cram. "Ratios of Profitability: Return on Assets Du Pont", College-Cram.com. 14 May 2008
  11. ↑ Template:Cite book
  12. ↑ 12.0 12.1 12.2 Groppelli, p. 435.
  13. ↑ 13.0 13.1 Cite error: Invalid <ref> tag; no text was provided for refs named Groppelli, p. 436
  14. ↑ Template:Cite book
  15. ↑ Bodie, p. 459.
  16. ↑ Groppelli, p. 438.
  17. ↑ Weygandt, J. J., Kieso, D. E., & Kell, W. G. (1996). Accounting Principles (4th ed.). New York, Chichester, Brisbane, Toronto, Singapore: John Wiley & Sons, Inc. p. 801-802.
  18. ↑ Weygandt, J. J., Kieso, D. E., & Kell, W. G. (1996). Accounting Principles (4th ed.). New York, Chichester, Brisbane, Toronto, Singapore: John Wiley & Sons, Inc. p. 800.
  19. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named Groppelli, p. 439
  20. ↑ Groppelli, p. 440; Williams, p. 640.
  21. ↑ 21.0 21.1 21.2 Groppelli, p. 441.
  22. ↑ 22.0 22.1 Groppelli, p. 446.
  23. ↑ Groppelli, p. 449.
  24. ↑ 24.0 24.1 Groppelli, p. 447.
Retrieved from "http://wiki.objclt.ca/wiki/index.php?title=Mathematic_Expression&oldid=505"