Formula SheetRATIOS - FORMULA SHEET - FINANCIAL MANAGEMENT(A)(B)PROFITABILITY RATIOSASSET MANAGEMENT/ACTIVITY RATIOS(in relation to sales)Profit after TaxCredit SalesNET PROFIT RATIO/=DEBTORS TURNOVER=PROFIT MARGINSalesAverage DebtorsGross ProfitDAYS SALES OUTSTANDING/Average Debtors X 360GROSS PROFIT RATIO=COLLECTION PERIOD=Sales(days)Credit SalesOperating Profit*Credit PurchasesOPERATING PROFIT=CREDITORS TURNOVER=RATIOSalesAverage Creditors(in relation to investment)Profit after TaxAverage Creditors X 360RETURN ON EQUITY=PAYMENTS PERIOD=(ROE)Common Equity**(days)Credit PurchasesOperating Profit*Cost of SalesRETURN ON CAPITAL=INVENTORY TURNOVER=EMPLOYED (ROCE)Capital Employed***Average InventoryProfit after TaxAverage Stock X 360RETURN ON TOTAL=STOCK PERIOD (days)=ASSETS (ROA)Average Total AssetsCost of SalesOperating Profit*SalesBASIC EARNING POWER=TOTAL ASSET TURNOVER=(BEP)Average Total AssetsAverage Total Assets(C)SHAREHOLDER'S FUNDS/MARKET VALUE RATIOSDividends per shareDIVIDEND YIELD=Market Price per shareProfit after Tax - Pref. Div.NotesEARNINGS PER SHARE=# of Ord. shares in issue* Operating Profit = Profit before Interest and Taxes** Common Equity = Ordinary Shares + All ReservesProfit after Tax - Pref. Div.or Total Assets - Total DebtDIVIDEND COVER=Ordinary dividendsNote - Long-Term Debt includes Preference Shares because they belong to "outside'' owners who are given preference (to ordinary shareholders) along with debt holders when a company is liquidated.Market price per sharePRICE EARNINGS RATIO=Earnings per share***Capital Employed=Common Equity+Long-Term Debtor Total Assets - Short-Term Debtor Fixed Assets + Working CapitalMarket price per shareCommon EquityMARKET TO BOOK=**** Book Value per share=VALUE RATIOBook value per share****# of Ord. shares in issue(D)DEBT RATIOSTIMES-INTEREST-EARNED/Operating ProfitINTEREST COVER=Interest chagresOperating profit +Depreciation +EBITDALease paymentsCoverage Ratio=Interest + principalpmts + lease pmtsNet Cash Flow fromOperating Activities +CASH FLOW INTEREST=Interest Paid+Taxes PaidCOVERAGEInterest PaidNet Cash Flow fromOPERATING CASH FLOWOperating ActivitiesTO SALESSalesNet Cash Flow fromOPERATING CASH FLOWOperating ActivitiesTO NET PROFITProfit after TaxLong-Term DebtGEARING RATIO=Capital Employed***Total DebtDEBT RATIO/=DEBT TO ASSET RATIOTotal AssetsTotal DebtDEBT TO EQUITY=Common Equity(E)LIQUIDITY RATIOSCurrent AssetsCurrent Assets - StockCURRENT RATIO=QUICK RATIO=Current LiabilitiesCurrent LiabilitiesNet Cash Flow from Operating ActivitiesOPERATING CASH FLOW TO CURRENT LIABILITIES=Average Current Liabilities

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