Ratios and Their Meanings. Leverage Ratio

Ratios and their meanings.
Leverage Ratio
Debt Ratio:
The debt ratio measures the amount of leverage used by a company in terms of total debt to
total assets. A debt ratio greater than 1.0 (100%) tells you that a company has
more debt than assets. Meanwhile, a debt ratio less than 100% indicates that a company has
more assets than debt.
Debt Ratio including short term: ?
TOL/TNWX:
This ratio measures the total leverage employed by the business; meaning that the firm has
used its net worth as a lever to raise outside funds.
Interest service coverage ratio:

The interest coverage ratio indicates the amount of a company's equity compared
to the amount of interest it must pay on all debts for a given period.
This is expressed as a ratio and is most often computed on an annual basis.
Debt service coverage ratio:

In the context of corporate finance, the debt-service coverage ratio (DSCR) is a
measurement of a firm's available cash flow to pay current debt obligations. The
DSCR shows investors whether a company has enough income to pay its debts.
Liquidity Ratio
Net working capital to total assets:

The Working Capital to Total Assets ratio measures a company's ability to cover
its short term financial obligations (Total Current Liabilities) by comparing
its Total Current Assets to its Total Assets.
current ratio:
The current ratio is a liquidity ratio that measures a company's ability to pay short-
term obligations or those due within one year. It tells investors and analysts how a
company can maximize the current assets on its balance sheet to satisfy
its current debt and other payables.
Quick ratio:
The quick ratio indicates a company's capacity to pay its current liabilities without
needing to sell its inventory or get additional financing. ... The higher the ratio result,
the better a company's liquidity and financial health; the lower the ratio, the more
likely the company will struggle with paying debts.
Cash ratio:
The cash ratio is a measurement of a company's liquidity, specifically the ratio of a
company's total cash and cash equivalents to its current liabilities. The metric
calculates a company's ability to repay its short-term debt with cash or near-
cash resources, such as easily marketable securities.
Interval measure:
The interval measure provides information about how many days a company will
can continue to operate using the funds it has on hand.
Efficiency Ratios:
Sales-to-assets ratio:
The asset turnover ratio measures the value of a company's sales or revenues
relative to the value of its assets. The asset turnover ratio can be used as an
indicator of the efficiency with which a company is using its assets to generate
revenue.
Sales-to-net-working-capital:
The working capital turnover ratio is also referred to as net sales to working
capital. It indicates a company's effectiveness in using its working capital.
The working capital turnover ratio is calculated as
follows: net annual sales divided by the average amount of working capital during
the same year.
The days sales of inventory (DSI) is a financial ratio that indicates the average time

in days that a company takes to turn its inventory, including goods that are a work
in progress, into sales.
Inventory turnover is a ratio showing how many times a company has sold and
replaced inventory during a given period. A company can then divide the days in the
period by the inventory turnover formula to calculate the days it takes to sell
the inventory on hand.
The average collection period ratio measures the average number of days clients

take to pay their bills, indicating the effectiveness of the business's credit
and collection policies. This ratio also determines if the credit terms are realistic.
The accounts receivable turnover ratio, also known as the debtor’s turnover ratio, is
an efficiency ratio that measures how efficiently a company is collecting revenue – and by
extension, how efficiently it is using its assets. The accounts receivable turnover ratio
measures the number of times over a given period that a company collects its
average accounts receivable.
The days payable outstanding (DPO) is a financial ratio that calculates the

average time it takes a company to pay its bills and invoices to other company and
vendors by comparing accounts payable, cost of sales, and number of days bills
remain unpaid.
Probability Ratio
The net profit margin is equal to how much net income or profit is generated
as a percentage of revenue. Net profit margin is the ratio of net profits
to revenues for a company or business segment. Net profit margin is typically
expressed as a percentage but can also be represented in decimal form. The
net profit margin illustrates how much of each dollar in revenue collected by a
company translates into profit.
Return on assets is a profitability ratio that provides how much profit a company is

able to generate from its assets. In other words, return on assets (ROA) measures
how efficient a company's management is in generating earnings from their
economic resources or assets on their balance sheet
Return on equity (ROE) is a ratio that provides investors with insight into how

efficiently a company (or more specifically, its management team) is handling the
money that shareholders have contributed to it. In other words, it measures the
profitability of a corporation in relation to stockholders' equity.
The dividend payout ratio is the fraction of net income a firm pays to its stockholders in
dividends: The part of earnings not paid to investors is left for investment to provide for
future earnings growth.
Market Value Ratio

The price-earnings ratio, also known as P/E ratio, P/E, or PER, is the ratio of a company's
share price to the company's earnings per share. The ratio is used for valuing companies and
to find out whether they are overvalued or undervalued.
The dividend yield or dividend-price ratio of a share is the dividend per share, divided by
the price per share. It is also a company's total annual dividend payments divided by its
market capitalization, assuming the number of shares is constant. It is often expressed as a
percentage.
The book-to-market ratio is one indicator of a company's value.

The ratio compares a firm's book value to its market value. ... A firm's market value
is determined by its share price in the stock market and the number of shares it has
outstanding, which is its market capitalization.
In management accounting, the Cash conversion cycle measures how long a firm will be
deprived of cash if it increases its investment in inventory in order to expand customer sales.
It is thus a measure of the liquidity risk entailed by growth

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Ratios and Their Meanings. Leverage Ratio

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Ratios and their meanings.

Debt Ratio including short term: ?

Interest service coverage ratio:

Debt service coverage ratio:

Net working capital to total assets:

The days sales of inventory (DSI) is a financial ratio that indicates the average time

The average collection period ratio measures the average number of days clients

The days payable outstanding (DPO) is a financial ratio that calculates the

Return on assets is a profitability ratio that provides how much profit a company is

Return on equity (ROE) is a ratio that provides investors with insight into how

Market Value Ratio

The book-to-market ratio is one indicator of a company's value.

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