OMMON RATIOS AND THEIR TORMUTAT Liquipiry Ratios measures the company's abilty to pay its bil CURRENT RATIO. caren QUICK RATIO CA- Inventories / CL PROFITABILITY RATIOS measures the company’s abilily (0 gonerate eamings, IGROSS PROFIT MARGIN GP/Sales_* Where GP = Salos - COGS INET PROFIT MARGIN, PAT/ Sales JOPERATING PROF MARGIN PBIT*/Sales * Whore PBIT = Operating Profit ROA PAT/TA* ‘average assets to be used where ROCE PBIT"/CE ** Where PBIT = PBT + Int. Exp. * Where CE= TA-CL ROE PAT - Prof. Div /NW SOLVENCY LEVERAGE | CAPITAL STRUCTURE RATIOS measures the extent to which the company’s assets are financed with debt DEBT EQUITY RATIO Long term debt / Net Worth lbEBT RATIO Long term debt / Total Assets TIMES INTEREST EARNED PAT + Depreciation + Interest (PBDI)/ interest Coverage Ratio) Interest Expense (CA-CL)/CA Nwe TOCA EFFICIENCY | PRODUCTIVITY RATIOS neasures the company's abilty (0 utilize its ass CAPITAL TURNOVER Net Sales / Capital Employed MULTIPLE ots: Net Sales / NWC (CA - CL) COGS/ Inventory INVENTORY TURNOVER MULTIPLE [Calculate Avg. Daily COGS 360/305 toa Year) AVG. INVENTORY HOLDING Inventory / Avg. Daily COGS PERIOD SS TURNOVER Net Sales /Receivablos RECEIVABLE raULTIPLE Calculate Avg. Daily Sales 360/365 toa Year) laVG. COLLECTION PERIOD Receivables / Avg, Daily Sales WALUATION RATIO vroasures the market perception about the company's future prospects PAT-Pref. Divino, of shares Market Price / EPS NW" No. of Eq. Shares WhereNW¥= share copitaltreserves&Surplus Dividend Paid / Pat Is00K VALUE PER SHARE pivIDEND PAYOUT RATIO