Understanding Financial Ratios: Profitability, Leverage,

Financial Ratios *NOTE: Profit and Income are usually interchangeable; that is the case here. Gross Profit=Sales - COGS Operating Profit=Gross Profit - Operating Expenses Net Profit=Operating Profit - Interest - Taxes Working Capital=Current Assets - Current Liabilities Earnings per Share=Net Profit / Shares Outstanding Profitability Ratios Gross Profit Margin=Gross Profit / Sales Operating Profit Margin=Operating Profit / Sales Net Profit Margin=Net Profit / Sales Return on Assets=Net Profit / Total Assets Return on Equity=Net Profit / Shareholders' Equity Leverage Ratios Debt to Equity=Total Liabilities / Shareholders' Equity Debt to Assets=Total Liabilities / Total Assets Interest Coverage=Operating Profit / Interest Liquidity Ratios Current Ratio=Current Assets / Current Liabilities Quick Ratio=(Current Assets - Inventory) / Current Liabilities Efficiency Ratios Total Asset Turnover=Sales / Total Assets PPE Turnover=Sales / PPE Cash Turnover=Sales / Cash Working Capital Turnover=Sales / Working Capital Market Ratios Price-to-Earnings=Market Price per Share / Earnings per Share Price-to-Book=Market Price per Share / Book Value per Share Dividend Yield=Dividends per Share / Market Price per Share Dividend Payout=Dividends per Share / Earnings per Share Miscellaneous Sales Growth=(New Sales - Old Sales) / Old Sales