Financial Ratios Formula Key

Liquidity Ratios

  Current Ratio  = Total Current Assets / Total Current Liabilities

  Quick Ratio  = (Cash + Accounts Receivable) / Total Current Liabilities

  Working Capital  = Total Current Assets - Total Current Liabilities

Financial Leverage / Coverage Ratios  Debt-to-Equity Ratio   = Total Liabilities / Total Equity

  Estimated Debt Service*  = Current Long Term Debt + Interest

  Debt Service Coverage Ratio*

  = EBITDA / Debt Service

  Interest Coverage Ratio   = EBITDA / Interest Expense  Senior Debt to Cash Flow*   = Senior Debt / EBITDA  Debt to Cash Flow*   = Long Term Liabilities / EBITDA

  Debt to Capitalization  = Total Liabilities / (Total Liabilities + Total Equity)

Profitability Ratios  Operating Profit Margin   = Operating Profit / Sales

  Net Profit Margin  = Adjusted Net Profit before Taxes / Sales

  Return on Equity*   = Net Income / Total Equity  Return on Assets*   = Net Income / Total AssetsActivity / Efficiency Ratios

  Accounts Receivable Days*  = (Accounts Receivable / Sales) * 365

  Accounts Payable Days*   = (Accounts Payable / COGS) * 365  Inventory Days*   = (Inventory / COGS) * 365  Fixed Asset Turnover*   = Sales / Gross Fixed Assets

* These formulas have been scaled to approximate annual statistics