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| {{Use dmy dates|date=July 2013}}
| | 41 year old Graphic Pre-press Trades Worker Ty from Muenster, really likes quilting, ganhando dinheiro na internet and keep. Keeps a trip blog and has heaps to write about after going to Historic Inner City of Paramaribo.<br><br>Here is my web-site - [http://ganhardinheironainternet.comoganhardinheiro101.com ganhar dinheiro] |
| {{Corporate finance}}
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| {{Accounting}}
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| A '''financial ratio''' (or '''accounting ratio''') is a relative magnitude of two selected numerical values taken from an enterprise's [[financial statement]]s. Often used in [[accounting]], there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers within a firm, by current and potential [[shareholder]]s (owners) of a firm, and by a firm's [[creditor]]s. [[Financial analyst]]s use financial ratios to compare the strengths and weaknesses in various companies.<ref>{{Cite book|last = Groppelli |first = Angelico A. |coauthors = Ehsan Nikbakht |title = Finance, 4th ed |publisher = Barron's Educational Series, Inc.|year = 2000 |pages =433 |isbn = 0-7641-1275-9 }}</ref> If shares in a company are traded in a [[financial market]], the market price of the shares is used in certain financial ratios.
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| Ratios can be expressed as a [[Decimal separator|decimal]] value, such as 0.10, or given as an equivalent [[percent]] value, such as 10%. Some ratios are usually quoted as percentages, especially ratios that are usually or always less than 1, such as [[earnings yield]], while others are usually quoted as decimal numbers, especially ratios that are usually more than 1, such as [[P/E ratio]]; these latter are also called '''multiples.''' Given any ratio, one can take its [[Reciprocal (mathematics)|reciprocal]]; if the ratio was above 1, the reciprocal will be below 1, and conversely. The reciprocal expresses the same information, but may be more understandable: for instance, the earnings yield can be compared with bond yields, while the [[P/E ratio]] cannot be: for example, a P/E ratio of 20 corresponds to an earnings yield of 5%.
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| ==Sources of data for financial ratios==
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| Values used in calculating financial ratios are taken from the [[balance sheet]], [[income statement]], [[statement of cash flows]] or (sometimes) the [[statement of retained earnings]]. These comprise the firm's "accounting statements" or [[financial statements]]. The statements' data is based on the accounting method and accounting standards used by the organization.
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| ==Purpose and types of ratios==
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| Financial ratios quantify many aspects of a business and are an integral part of the [[financial statement analysis]]. Financial ratios are categorized according to the financial aspect of the business which the ratio measures. '''Liquidity ratios''' measure the availability of cash to pay debt.<ref>Groppelli, p. 434.</ref> '''Activity ratios''' measure how quickly a firm converts non-cash assets to cash assets.<ref name="Groppelli, p. 436">Groppelli, p. 436.</ref> '''Debt ratios''' measure the firm's ability to repay long-term debt.<ref name="Groppelli, p. 439">Groppelli, p. 439.</ref> '''Profitability ratios''' measure the firm's use of its assets and control of its expenses to generate an acceptable rate of return.<ref>Groppelli, p. 442.</ref> '''Market ratios''' measure investor response to owning a company's stock and also the cost of issuing stock.<ref name="Groppelli, p. 445">Groppelli, p. 445.</ref>
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| These are concerned with the return on investment for [[shareholder]]s, and with the relationship between return and the value of an investment in company’s shares.
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| Financial ratios allow for comparisons
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| * between companies
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| * between industries
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| * between different time periods for one company
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| * between a single company and its industry average
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| Ratios generally are not useful unless they are [[Benchmarking|benchmarked]] against something else, like past performance or another company. Thus, the ratios of firms in different industries, which face different risks, capital requirements, and competition are usually hard to compare.
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| ==Accounting methods and principles==
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| Financial ratios may not be directly comparable between companies that use different [[accounting methods]] or follow various [[standard accounting practice]]s. Most [[public company|public companies]] are required by law to use [[generally accepted accounting principles]] for their home countries, but [[private company|private companies]], [[partnership]]s and [[sole proprietorship]]s may not use accrual basis accounting. Large multi-national corporations may use [[International Financial Reporting Standards]] to produce their financial statements, or they may use the generally accepted accounting principles of their home country.
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| There is no international standard for calculating the summary data presented in all financial statements, and the terminology is not always consistent between companies, industries, countries and time periods.
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| ==Abbreviations and terminology==
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| Various abbreviations may be used in financial statements, especially financial statements summarized on the [[Internet]]. [[Sales (accounting)|Sales]] reported by a firm are usually [[net sales]], which deduct returns, allowances, and early payment discounts from the charge on an [[invoice]]. [[Net income]] is always the amount ''after'' taxes, depreciation, amortization, and interest, unless otherwise stated. Otherwise, the amount would be EBIT, or EBITDA (see below).
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| Companies that are primarily involved in providing services with labour do not generally report "Sales" based on hours. These companies tend to report "revenue" based on the monetary value of income that the services provide.
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| Note that Shareholders' Equity and Owner's Equity are ''not'' the same thing, Shareholder's Equity represents the total number of shares in the company multiplied by each share's book value; Owner's Equity represents the total number of shares that an individual shareholder owns (usually the owner with [[controlling interest]]), multiplied by each share's book value. It is important to make this distinction when calculating ratios.
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| ===Other abbreviations===
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| (''Note: '' These are not ratios, but values in currency.)
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| * [[Cost of goods sold|COGS]] = Cost of goods sold, or cost of sales.
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| * [[EBIT]] = [[Net income|Earnings]] before [[interest]] and [[taxes]]
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| * [[EBITDA]] = Earnings before interest, taxes, [[depreciation]], and [[amortization]]
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| * [[Earnings per share|EPS]] = Earnings per share
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| ==Ratios==
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| <h1>Profitability ratios</h1>
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| Profitability ratios measure the company's use of its assets and control of its expenses to generate an acceptable rate of return
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| :;[[Gross margin]], '''Gross profit margin''' or '''Gross Profit Rate'''<ref>Williams, P. 265.</ref><ref name="Williams, p. 1094">Williams, p. 1094.</ref>
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| :::<math>\frac{\mbox{Gross Profit}}{\mbox{Net Sales}}</math> :::'''OR''' :::<math>\frac{\mbox{Net Sales -- COGS}}{\mbox{Net Sales}}</math>
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| ----</hr>
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| :;[[Operating margin]], '''Operating Income Margin''', '''Operating profit margin''' or '''Return on sales''' (ROS)<ref name="Williams, p. 1094"/><ref>{{Cite book|last=Williams |first=Jan R. |coauthors= Susan F. Haka, Mark S. Bettner, Joseph V. Carcello |title=Financial & Managerial Accounting |publisher=McGraw-Hill Irwin |year=2008 |pages= 266 |isbn=978-0-07-299650-0}}</ref>
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| :::<math>\frac{\mbox{Operating Income}}{\mbox{Net Sales}}</math>
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| :Note: Operating income is the difference between operating revenues and operating expenses, but it is also sometimes used as a synonym for EBIT and operating profit.<ref>http://www.investorwords.com/3460/operating_income.html Operating income definition</ref> This is true if the firm has no non-operating income. ([[Earnings before interest and taxes]] / Sales<ref>Groppelli, p. 443.</ref><ref>{{Cite book|last = Bodie |first = Zane |coauthors = Alex Kane and Alan J. Marcus |title = Essentials of Investments, 5th ed |publisher = McGraw-Hill Irwin |year = 2004 |pages =459 |isbn = 0-07-251077-3 }}</ref>)
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| ----</hr>
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| :;[[Profit margin]], '''net margin''' or '''net profit margin'''<ref name="Groppelli, p. 444">Groppelli, p. 444.</ref>
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| :::<math>\frac{\mbox{Net Profit}}{\mbox{Net Sales}}</math>
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| ----</hr>
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| :;[[Return on equity]] (ROE)<ref name="Groppelli, p. 444"/>
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| :::<math>\frac{\mbox{Net Income}}{\mbox{Average Shareholders Equity}}</math>
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| ----</hr>
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| :;[[Return on assets]] (ROA ratio or [[Du Pont Ratio]])<ref name="Groppelli, p. 445"/>
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| :::<math>\frac{\mbox{Net Income}}{\mbox{Average Total Assets}}</math>
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| ----</hr>
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| :;[[Return on assets]] (ROA)<ref>[http://www.college-cram.com/study/finance/ratios-of-profitability/return-on-assets/ Professor Cram. "Ratios of Profitability: Return on Assets" College-Cram.com. 14 May 2008 <http://www.college-cram.com/study/finance/ratios-of-profitability/return-on-assets/>]</ref>
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| :::<math>\frac{\mbox{Net Income}}{\mbox{Total Assets}}</math>
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| ----</hr>
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| :;[[Return on assets Du Pont]] (ROA Du Pont)<ref>[http://www.college-cram.com/study/finance/ratios-of-profitability/return-on-assets-du-pont/ Professor Cram. "Ratios of Profitability: Return on Assets Du Pont" College-Cram.com. 14 May 2008 <http://www.college-cram.com/study/finance/ratios-of-profitability/return-on-assets-du-pont/>]</ref>
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| :::<math>\left(\frac{\mbox{Net Income}}{\mbox{Net Sales}}\right)\left(\frac{\mbox{Net Sales}}{\mbox{Total Assets}}\right)</math>
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| ----</hr>
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| :;[[Return on Equity Du Pont]] (ROE Du Pont)
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| :::<math>\left(\frac{\mbox{Net Income}}{\mbox{Net Sales}}\right)\left(\frac{\mbox{Net Sales}}{\mbox{Average Assets}}\right)\left(\frac{\mbox{Average Assets}}{\mbox{Average Equity}}\right)</math>
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| ----</hr>
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| :;[[Return on net assets]] (RONA)
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| :::<math>\frac{\mbox{Net Income}}{\mbox{Fixed Assets + Working Capital}}</math>
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| ----</hr>
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| :;[[Return on capital]] (ROC)
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| :::<math>\frac{\mbox{EBIT(1 − Tax Rate)}}{\mbox{Invested Capital}}</math>
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| ----</hr>
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| :;[[Risk adjusted return on capital]] (RAROC)
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| :::<math>\frac{\mbox{Expected Return}}{\mbox{Economic Capital}}</math> :::'''OR''' :::<math>\frac{\mbox{Expected Return}}{\mbox{Value at Risk}}</math>
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| ----</hr>
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| :;[[Return on capital employed]] (ROCE)
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| :::<math>\frac{\mbox{EBIT}}{\mbox{Capital Employed}}</math>
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| :::Note: this is somewhat similar to (ROI), which calculates Net Income per Owner's Equity
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| ----</hr>
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| :;[[Cash flow return on investment]] (CFROI)
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| :::<math>\frac{\mbox{Cash Flow}}{\mbox{Market Recapitalisation}}</math>
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| ----</hr>
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| :;[[Efficiency ratio]]
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| :::<math>\frac{\mbox{Non-Interest expense}}{\mbox{Revenue}}</math>
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| ----</hr>
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| :;[[Net gearing]]
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| :::<math>\frac{\mbox{Net debt}}{\mbox{Equity}}</math>
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| ----</hr>
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| :;[[Basic Earnings Power Ratio]]<ref>{{Cite book| last = Weston | first = J. | title = Essentials of Managerial Finance | publisher = Dryden Press | location = Hinsdale | year = 1990 | isbn = 0-03-030733-3 | page = 295}}</ref>
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| :::<math>\frac{\mbox{EBIT}}{\mbox{Total Assets}}</math>
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| ----</hr>
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| ----</hr>
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| <h1>Liquidity ratios</h1>
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| [[Accounting liquidity|Liquidity]] ratios measure the availability of cash to pay debt.
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| :;[[Current ratio|Current ratio (Working Capital Ratio)]]<ref name="Groppelli, p. 435">Groppelli, p. 435.</ref>
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| :::<math>\frac{\mbox{Current Assets}}{\mbox{Current Liabilities}}</math><hr></hr>
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| :;[[Quick ratio|Acid-test ratio (Quick ratio)]]<ref name="Groppelli, p. 435"/>
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| :::<math>\frac{\mbox{Current Assets -- (Inventories + Prepayments)}}{\mbox{Current Liabilities}}</math>
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| ----</hr>
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| :;[[Cash ratio]]<ref name="Groppelli, p. 435"/>
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| :::<math>\frac{\mbox{Cash and Marketable Securities}}{\mbox{Current Liabilities}}</math>
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| ----</hr>
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| :;[[Operating cash flow|Operation cash flow]] ratio
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| :::<math>\frac{\mbox{Operating Cash Flow}}{\mbox{Total Debts}}</math>
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| ----</hr>
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| <h1>Activity ratios (Efficiency Ratios)</h1>
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| Activity ratios measure the effectiveness of the firms use of resources.
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| :;[[Debtor collection period|Average collection period]]<ref name="Groppelli, p. 436"/>
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| :::<math>\frac{\mbox{Accounts Receivable}}{\mbox{Annual Credit Sales ÷ 365 Days}}</math>
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| :;[[Operating leverage#DOL and Operating income|Degree of Operating Leverage]] (DOL)
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| :::<math>\frac{\mbox{Percent Change in Net Operating Income}}{\mbox{Percent Change in Sales}}</math>
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| :;[[DSO Ratio]].<ref>{{cite book |author=Houston, Joel F.; Brigham, Eugene F. |title=Fundamentals of Financial Management|publisher=South-Western College Pub |location=[Cincinnati, Ohio] |year=2009 |page=90 |isbn=0-324-59771-1}}</ref>
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| :::<math>\frac{\mbox{Accounts Receivable}}{\mbox{Total Annual Sales ÷ 365 Days}}</math>
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| :;[[Average payment period]]<ref name="Groppelli, p. 436"/>
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| :::<math>\frac{\mbox{Accounts Payable}}{\mbox{Annual Credit Purchases ÷ 365 Days}}</math>
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| :;[[Asset turnover]]<ref>Bodie, p. 459.</ref>
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| :::<math>\frac{\mbox{Net Sales}}{\mbox{Total Assets}}</math>
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| :;[[Stock turnover]] ratio<ref>Groppelli, p. 438.</ref><ref>Weygandt, J. J., Kieso, D. E., & Kell, W. G. (1996). ''Accounting Principles'' (4th ed.). New York, Chichester, Brisbane, Toronto, Singapore: John Wiley & Sons, Inc. p. 801-802.</ref>
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| :::<math>\frac{\mbox{Cost of Goods Sold}}{\mbox{Average Inventory}}</math>
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| :;[[Receivables Turnover Ratio]]<ref>Weygandt, J. J., Kieso, D. E., & Kell, W. G. (1996). ''Accounting Principles'' (4th ed.). New York, Chichester, Brisbane, Toronto, Singapore: John Wiley & Sons, Inc. p. 800.</ref>
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| :::<math>\frac{\mbox{Net Credit Sales}}{\mbox{Average Net Receivables}}</math>
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| :;[[Inventory conversion]] ratio<ref name="Groppelli, p. 439"/>
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| :::<math>\frac{\mbox{365 Days}}{\mbox{Inventory Turnover}}</math>
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| :;Inventory conversion period (essentially same thing as above)
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| :::<math>\left (\frac{\mbox{Inventory}}{\mbox{Cost of Goods Sold}}\right)\mbox{365 Days}</math>
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| :;Receivables conversion period
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| :::<math>\left (\frac{\mbox{Receivables}}{\mbox{Net Sales}}\right)\mbox{365 Days}</math>
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| :;Payables conversion period
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| :::<math>\left (\frac{\mbox{Accounts Payables}}{\mbox{Purchases}}\right)\mbox{365 Days}</math>
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| :;[[Cash conversion cycle|Cash Conversion Cycle]]
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| :::<math>\mbox{Inventory Conversion Period + Receivables Conversion Period - Payables Conversion Period}</math>
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| ===Debt ratios (leveraging ratios)===
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| Debt ratios quantify the firm's ability to repay long-term debt. Debt ratios measure [[leverage (finance)|financial leverage]].
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| :;[[Debt ratio]]<ref>Groppelli, p. 440; Williams, p. 640.</ref>
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| :::<math>\frac{\mbox{Total Liabilities}}{\mbox{Total Assets}}</math>
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| :;[[Debt to equity ratio]]<ref name="Groppelli, p. 441">Groppelli, p. 441.</ref>
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| :::<math>\frac{\mbox{Long-term Debt + Value of Leases}}{\mbox{Average Shareholders Equity}}</math>
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| :;[[Long-term Debt to equity]] (LT Debt to Equity)<ref name="Groppelli, p. 441"/>
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| :::<math>\frac{\mbox{Long-term Debt}}{\mbox{Total Assets}}</math>
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| :;[[Times interest earned|Times interest earned ratio (Interest Coverage Ratio)]]<ref name="Groppelli, p. 441"/>
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| :::<math>\frac{\mbox{EBIT}}{\mbox{Annual Interest Expense}}</math>
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| :::'''OR'''
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| :::<math>\frac{\mbox{Net Income}}{\mbox{Annual Interest Expense}}</math>
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| :;[[Debt service coverage ratio]]
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| :::<math>\frac{\mbox{Net Operating Income}}{\mbox{Total Debt Service}}</math>
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| ===Market ratios===
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| Market ratios measure investor response to owning a company's stock and also the cost of issuing stock.
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| These are concerned with the return on investment for shareholders, and with the relationship between return and the value of an investment in company’s shares.
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| :;[[Earnings per share]] (EPS)<ref name="Groppelli, p. 446"/>
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| :::<math>\frac{\mbox{Net Earnings}}{\mbox{Number of Shares}}</math>
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| :;[[Payout ratio]]<ref name="Groppelli, p. 446">Groppelli, p. 446.</ref><ref>Groppelli, p. 449.</ref>
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| :::<math>\frac{\mbox{Dividends}}{\mbox{Earnings}}</math>
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| :::'''OR'''
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| :::<math>\frac{\mbox{Dividends}}{\mbox{EPS}}</math>
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| :;[[Dividend cover]] (the inverse of Payout Ratio)
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| :::<math>\frac{\mbox{Earnings per Share}}{\mbox{Dividend per Share}}</math>
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| :;[[PE ratio|P/E ratio]]
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| :::<math>\frac{\mbox{Market Price per Share}}{\mbox{Diluted EPS}}</math>
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| :;[[Dividend yield]]
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| :::<math>\frac{\mbox{Dividend}}{\mbox{Current Market Price}}</math>
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| :;Cash flow ratio or [[Price/cash flow ratio]]<ref name="Groppelli, p. 447">Groppelli, p. 447.</ref>
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| :::<math>\frac{\mbox{Market Price per Share}}{\mbox{Present Value of Cash Flow per Share}}</math>
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| :;[[P/B ratio|Price to book value ratio]] (P/B or PBV)<ref name="Groppelli, p. 447"/>
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| :::<math>\frac{\mbox{Market Price per Share}}{\mbox{Balance Sheet Price per Share}}</math>
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| :;[[Price/sales ratio]]
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| :::<math>\frac{\mbox{Market Price per Share}}{\mbox{Gross Sales}}</math>
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| :;[[PEG ratio]]
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| :::<math>\frac{\mbox{Price per Earnings}}{\mbox{Annual EPS Growth}}</math>
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| Other Market Ratios
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| :;[[EV/EBITDA]]
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| :::<math>\frac{\mbox{Enterprise Value}}{\mbox{EBITDA}}</math>
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| :;[[EV/Sales]]
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| :::<math>\frac{\mbox{Enterprise Value}}{\mbox{Net Sales}}</math>
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| :;[[Cost/Income ratio]]
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| Sector-specific ratios
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| :;[[EV/capacity]]
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| :;[[EV/output]]
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| ===Capital budgeting ratios===
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| {{Main|Capital budgeting}}
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| In addition to assisting management and owners in diagnosing the financial health of their company, ratios can also help managers make decisions about investments or projects that the company is considering to take, such as acquisitions, or expansion.
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| Many formal methods are used in capital budgeting, including the techniques such as
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| * [[Net present value]]
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| * [[Profitability index]]
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| * [[Internal rate of return]]
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| * [[Modified internal rate of return]]
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| * [[Equivalent annual cost|Equivalent annuity]]
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| ==See also==
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| * [[Outline of finance#Valuation]]
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| * [[List of financial performance measures]]
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| * [[Greeks (finance)]]
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| ==References==
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| {{Reflist|3}}
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| ==External links==
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| * [http://www.retailinvestor.org/valuemetrics.html Stock Valuation Metrics]
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| {{Financial ratios}}
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| [[Category:Financial ratios|*]]
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