Name	Equation	Description
Asset Turnover	Net Sales / Total Assets	Shows relationship between revenue & assets.
Average Collection Period	Accounts Receivable / (Annual Credit Sales / 365)	The time it takes for receivables to be paid.
Cash Conversion Cycle	Inventory Conversion Period + Receivables Conversion Period - Payables Conversion Period	Length of time for investment to increase sales.
Inventory Conversion Period	365 / Inventory Turnover Ratio	Measures time between purchasing inventory and selling it.
Inventory Conversion Ratio	(Sales x 0.5) / Cost of Goods Sold	Shows how much borrowing is available after inventory becomes a receivable.
Inventory Turnover	Sales / Average Inventory	How many times inventory is sold to customers and replaced by the company.
Payables Conversion Period	(Accounts Payable / Purchases) x 365	Time it takes to pay accounts payable.
Receivables Conversion Period, DSO Ratio	(Receivables / Net Sales) x 365	Time it takes to collect accounts receivable.
Receivables Turnover Ratio	Net Credit Sales / Average Net Receivables	Measures how effectively a company uses its assets.

Name	Equation	Description
Assets	Liabilites + Equity	Anything of value owned by a company.
EBIT, Earnings Before Interest and Taxes	Revenue - Operating Expenses	Measures profit.
Equity	Assets - Liabilites	Measures a company's assets, after liabilities are paid.
Gross Profit	Revenue - Cost of Goods Sold	Measures profit after cost of goods sold are paid.
Liabilities	Assets - Equity	A financial obligation; money to be paid.
Net Profit, Net Income, Income	Gross Profit - Operating Expenses - Taxes - Interest	Measure of profit after all associated costs are paid.
Operating Profit	Gross Profit - Operating Expenses	Profit earned from a company's main activities; does not include investments.
Sales, Revenue, Sales Revenue, Net Sales	Gross Sales - Sales of Returns and Allowances	Measures sales, before costs and taxes are accounted for.

Name	Equation	Description
Debt to Equity Ratio	Total Liabilities / Shareholders Equity	How much equity vs debt is being used to pay for assets.
Debt Ratio	Total Liabilities / Total Assets	Debt compared to assets.
Debt Service Coverage Ratio	Net Operating Income / Total Debt Service	Cash available to pay off debt.
Long-Term Debt to Equity Ratio	Long-Term Liabilities / Equity	Equity vs long-term debt.

Name	Equation	Description
Book Value	Acquisition Cost - Depreciation	The value of an asset on a company's balance sheet.
Declining Balance, Reducing Balance	Depreciation Rate x Book Value at Beginning of Year	Commonly used method of accelerated depreciation.
Straight-Line Method	(Cost of Fixed Asset - Residual Value) / Useful Life of Asset (in years)	Easiest and most common method of depreciation.
Units of Production	[(Cost of Asset - Redidual Value) / Estimated Total Production] x Actual Production	Depreciation measured by how many units are produced.

Name	Equation	Description
Acid Test Ratio, Quick Ratio	(Current Assets - Inventories) / Current Liabilities	A quick way to measure a company's liquidity.
Cash Ratio	(Cash + Marketable Securities) / Current Liabilities	Cash compared to liabilities.
Current Ratio, Working Capital Ratio	Current Assets / Current Liabilities	Measures ability to pay short-term liabilities.
Operating Cash Flow Ratio	Operating Cash Flow / Total Debts	Ability to pay liabilities with operating cash flow.

Name	Equation	Description
Dividend Cover	Earnings per Share / Dividends per Share	Earnings compared to dividends.
Dividend Yield	Annual Dividends per Share / Price per Share	Dividends compared to market capitalization.
Dividends Per Share	Dividends Paid / Number of Shares	Amount of dividends for each share.
Earnings Per Share, EPS	Net Earnings / Number of Shares	Amount of earnings for each share.
Payout Ratio	Dividends / Earnings	Dividends per earnings.
PEG Ratio	Price per Earnings / Annual EPS Growth	Price of a stock compared to company growth.
Price / Sales Ratio	Price per Share / Revenue per Share	Comparing a stock to past performace and market.

Name	Equation	Description
Efficiency Ratio	Non-Interest Expense / Revenue	Measures efficiency of asset & liability usage.
Gross Profit Margin, Gross Margin Percentage, Gross Profit Ratio, Gross Profit Rate	Gross Profit / Revenue	Percentage of revenue left after deducting costs.
Operating Margin, Operating Income Margin, Operating Profit Margin, Return on Sales	Operating Income / Revenue	Used to evaluate pricing.
Profit Margin, Net Profit Margin, Net Margin, Net Profit Ratio	Net Profit / Revenue	How much revenue is kept in profit.
Return on Assets	Net Income / Total Assets	Profit compared to assets.
Return on Capital	EBIT(1 - Tax Rate) / Invested Capital	Profit compared to capital.
Return on Equity	Net Income / Average Shareholder Equity	Profit compared to equity.
Return on Investment, ROI	(Gain from Investment - Cost of Investment) / Cost of Investment	Measures efficiency of an investment.
Return on Net Assets	Net Income / (Fixed Assets + Working Capital)	Income compared to net assets.
Risk-Adjusted Return on Capital	Expected Return / Economic Capital	ROI, adjusted for risk.