Breathtaking Balance Sheet Ratio Analysis Formulas
Ratio analysis formula for capital ratio.
Balance sheet ratio analysis formulas. Ratio 11 Days sales in receivables average collection period Ratio 12 Inventory turnover ratio. To calculate the gross profit of a company use the formula. Balance sheet with financial ratios.
It is calculated by subtracting current liabilities from current assests both of which are found on the balance sheet. Specifically we will discuss the following. Firstly the total debt includes a short term as well as long term funding and the total assets are collected which is easily available from the balance sheet.
The ratio demonstrates the percentage of profit left to pay for fixed expenses and call a profit. It has inbuilt formulas for all these ratios such as current ratio debt-equity ratio etc. They include only balance sheet items ie.
They include the following ratios. Ratio 10 Receivables turnover ratio. PG HA ROT minimal 2-4 CFO to interest.
Dividend Payout Ratio Dividend Paid Net Income Price Earning Ratio PE Ratio The price-to-earnings ratio or PE ratio provides the ratio of earnings per share against the current market price per share. The ratio is calculated by dividing the net profit after tax and preference dividend by number of equity shares. The balance sheet is divided into two parts that based on the following equation must equal each other or balance each other out.
Finally the debt ratio is calculated by dividing the total debt by the total assets. The main formula behind a balance sheet is. EB optimal capital structure PG HA Times interest earned TIE EBIT Interest expense Ability to meet interest payments as they mature.