Ratios and Good Times

My blog hasn't seen a lot of posts lately. Here's an example of what my posts would entail if I were blogging on a daily basis:

Check out the ratios and financial statement analysis tools I've been using this semester for Financial Statement Analysis (mostly reproduced here from memory since I'm using this as a review for tomorrow's final). Let me know if I've missed any good ones that I should add to my FSA toolbox.

Liquidity and Solvency
1. Current Ratio: Current Assets/Current Liabilities
2. Quick Ratio: Quick Assets/Current Liabilities
3. Times Interest Earned (AKA Interest Coverage Ratio): Cash Flow From Operations/Interest Paid (better measure than Earnings/Interest Expense)
4. Cash Burn Rate: (Cash collected from customers + Interest Income - Net operating cash flows)/365
5. Cash Collections From Customers: Credit Sales + Beginning A/R - Ending A/R
7. Debt to Equity: (can you guess?) Total Debt/Total Owners' Equity
8. Liabilities to Assets: Total Liabilities/Total Assets

Efficiency
1. Cash Conversion Cycle (AKA Net Days Working Capital): A/R Turnover (days) + Inventory Turnover (days) - A/P Turnover (days)
2. A/R Turnover: Credit Sales/Average A/R
3. Inventory Turnover: COGS/Average Inventory
4. A/P Turnover: Purchases (which equals COGS + Beg Inventory - Ending Inventory)/Average A/P
5. Asset Turnover: Sales/Average Assets
6. Fixed Asset Turnover: Sales/Average Fixed Assets
7. Average Collection Period: 365/AR Turnover
8. Days Inventory: 365/Inventory Turnover

Profitability
1. Return on Sales (AKA Profit Margin): Net Income/Net Sales
2. Return on Common Equity: (Net Income - Preferred Dividends)/Average Common Equity
3. Return on Assets: (Net Income + (Interest Expense x (1 - tax rate)) + Minority Interest)/Average Total Assets
4. Earnings Per Share: (Net Income - Preferred Dividends)/Weighted Average Common Shares Outstanding (aka WACSO)

Cash Flows
1. Times Interest Earned (also shown above): CFFO/Interest Paid
2. Return on Assets (a cash-centered approach): CFFO/Average Total Assets

Okay. I think you've had enough fun for now. It's time for you to go back to watching movies, going on walks, grocery gambling, and running (early morning is definitely the best).