28 Financial Ratios with Formulas:
Fixed Asset Ratio Formula = Fixed Assets / Capital Employed
Ratio to Current Assets to Fixed Assets = Current Assets / Fixed Assets
Proprietary Ratio Formula = Shareholder Fund / Total Tangible Assets
Fixed Interest Cover Formula = Net Profit Before Interest and Tax / Interest Charge
Fixed Dividend Cover Formula = Net Profit Before Interest and Tax / Dividend on Preference Share
Capacity Ratio Formula = Actual Hour Worked / Budgeted Hour * 100
Activity Ratio Formula = Standard Hours for Actual Production / Budgeted Standard Hour * 100
Efficiency Ratio Formula = Standard Hours for Actual Production / Actual Hour Worked * 100
Current Ratio Formula = Current Assets / Current Liability
Acid Test Formula = (Current Assets -Inventory)/(Current Liability)
Quick Ratio Formula = Quick Assets / Current Liabilities
Quick Ratio Formula = Quick Assets / Quick Liabilities
Absolute Liquidity = Cash + Marketable Securities + Net Receivable and Debtors
Cash Ratio Formula = Cash + Marketable Securities / Current Liability
Inventory Turnover Ratio Formula = Cost of Goods Sold / Average Inventory
Receivable Turnover Ratio Formula = Net Credit Sales / Average Accounts Receivable
Capital Turnover Ratio Formula = Net Sales (Cost of Goods Sold) / Capital Employed
Asset Turnover Ratio Formula = Turnover / Net Tangible Assets
Net Working Capital Turnover Ratio Formula = Net Sales / Net Working Capital
Cash Conversion Cycle Formula = Receivable Days + Inventory Days – Payable Days
Earning Margin formula = Net Income / Turnover * 100
Return on Investment formula = Profit Before Interest and Tax / Total Capital Employed
Return on Equity Formula = Profit After Taxation – Preference Dividends / Ordinary Shareholder’s Fund * 100
Earnings Per Share Formula = Earnings After Taxation – Preference Dividends / Number of Ordinary Shares
Operating Leverage Formula = % change in EBIT / % change in Sales
Financial Leverage formula = % change in Net Income / % change in EBIT
Total Leverage Formula = % change in Net Profit / % change in Sales
Debt Equity Formula = Long Term Debts / Shareholder’s Fund
Interest Coverage Formula = EBITDA / Interest Expense
Debt Service Coverage Formula = Operating Income / Debt Service