1、RatiosProfitabiIityratiosProfitabiIity an acceptableratios measure the firms use of its assets and control of its exp enses to gen erate rate of return.Gross margin, Gross profit margin or Gross Profit RateOROp erat ing margin, Operat ing In come Margin, Op erat i ng pro fit margin or Return on sale

2、s (ROS)Note: Op erating i ncome i s the difference betwee n op erat ing revenues and op erat ing expen ses, but it is a I so sometimes used as a syn onym for EBIT and operat ing p rofit3 This is true if the firm has no non-operating income. (Earnings before interest and taxes / Sales)Profitmargin, n

3、et margin or net profit marginReturnonequity (ROE)Returnoninvestment (ROIratio or Du Pont ratio)Returnonassets(ROA)ReturnonassetsDu Pont(ROA Du Pont)ReturnonEquityNet IncomeDu PontNet Sales(ROE Du Pont)Net Sales A ( Average AssetsAverage Assetsj 1 Average EquityReturn on net assets (RONA)Return on c

4、apital (ROC)Net Op crating Profit Adjusted TaxesOwners EquityRisk adjusted return on capita I (RAROC)ORReturn on capital employed (ROCE)Note: this is somewhat similar to (ROI), which calculates Net Income per Owners EquityCash flow return on investment (CFROI)Effieiency ratioNon-Interest IncomeNet I

5、nterest Income + Non-Interest IncomeNet gear ingLiquidity ratiosLiquidity ratios measure the aval lability of cash to pay debt.Current ratioAcid-test ratio (Ou i ck rat io)的Cuirent Assets - (Inventories + Prep merits)Current LiabilitiesOperation cash flow ratioActivity ratiosActivity ratios measure

6、the effectiveness of the firms use of resources.Average col lection periodDegree of Operating Leverage (DOL)Percent Change in Net Operating IncomePercent Change in SalesDSO RatioAverage payment periodAccounts PayableAnnual Credit Purchases -r 365 DaysAsset turnover)nventory turnover ratioReceivables

7、 TurnoverRatioInventory conversionratioInventory conversionperiodDebt ratios leverage.DebtratioDebtto equity ratioReceivables conversion periodPayables conversion perlodCash Conversion CycleInventory Conversion Period + Receivables Conversion Period Payables Conversion PeriodDebt ratios (leveraging

8、ratios)measure the firms ability to repay Iong-term debt. Debt ratios measure financ i a ILong-term Debt to equity (LT Debt to Equity)T imes interest-earned rat ioORDebt service coverage ratioMarket ratiosMarket ratios measure investor response to owning a company*s stock and a I so the cost of issuing stock.Earnings per share (EPS)Payout ratioORDividend cover (the inverse of Payout Ratio)P/E ratioDividend yieldCash flow ratio or P