Financial Statement Items, Key Ratios & Valuation Metrics

Current Assets

• Cash
• Marketable investments (short-term)
• Accounts receivable (acc. receiv.)
• Inventory (inv.)
• Prepaid assets (rent, insurance)

Non-Current Assets

• Long-term investments (LT investment)
• Property, plant, and equipment (PPE)
• Intangible assets (goodwill, patent)

Current Liabilities

• Accounts payable
• Accrued liabilities (taxes payable, wages payable, expenses that haven’t been paid yet)
• Short-term debt
• Deferred revenue
• Current maturities of long-term debt

Non-Current Liabilities

• Long-term debt (LT debt)
• Other long-term liabilities

Equity — Contributed Capital

• Common stock
• Additional paid-in capital (add. paid-in cap.)
• Treasury stock

Equity — Earned Capital

Retained earnings: beginning balance + net income − dividends = ending balance.

Profitability Ratios

• ROE = net income / avg. stockholders' equity
• ROA = net income / avg. total assets
• Gross Profit Margin (GPM) = (revenue − COGS) / revenue
• Net Profit Margin = net income / sales revenue

EBITDA and Margin

• EBITDA = revenue − COGS − operating expenses + depreciation + amortization (earnings before interest, taxes, depreciation, and amortization)
• EBITDA margin = EBITDA / revenue

Leverage and Solvency Ratios

• Debt/Equity = total liabilities / total stockholders' equity
• Long-term debt / Equity = long-term debt / total stockholders' equity
• Equity Multiplier = total assets / total stockholders' equity
• Interest Coverage = EBIT / interest expense

Liquidity Ratios

• Current Ratio = current assets / current liabilities
• Quick Ratio = quick assets / current liabilities

  Quick assets = cash + marketable securities + accounts receivable (or total current assets − inventory − prepaid assets).

• Cash Ratio = cash / current liabilities

Turnover and Activity Ratios

• Assets Turnover = sales / avg. total assets
• Inventory Turnover = COGS / avg. inventory
• Accounts Receivable Turnover = revenue / avg. accounts receivable
• PPE Turnover = sales revenue / avg. PPE
• PPE % Depreciation = accumulated depreciation / cost of depreciable assets

Working Capital and Collection Metrics

• Average Payment Period = avg. accounts payable / avg. daily purchases
• Average Collection Period = avg. accounts receivable / avg. daily sales
• Average Inventory Days = avg. inventory / avg. daily COGS
• Operating Cash Flow to CapEx = operating cash flows / annual capex
• Operating Cash Flow to Liabilities = operating cash flows / avg. current liabilities

Valuation and Per-Share Metrics

• Price-to-Earnings (P/E or PER) = current market price / EPS — or — market capitalization / net income
• Price-to-Book (P/B) = current market price / book value per share — or — market capitalization / equity value
• EV / EBITDA = (market capitalization + net debt) / EBITDA
• Basic EPS = (net income − preferred dividends) / avg. number of common shares outstanding
• Diluted EPS = (net income − preferred dividends + add-backs) / (avg. common shares + shares from convertible securities and stock options assumed converted)
• Dividend Payout Ratio = dividends per share (DPS) / EPS — or — total dividends / net income
• Dividend Yield = dividend per share / stock price

Accruals, Deferred Items, and Prepaids

• Accrued revenue — increases assets and revenues when revenue is earned but not yet billed or collected.
• Accrued expenses — increase expenses and liabilities and reduce retained earnings when expenses are incurred but not yet paid.
• Deferred revenue — increases cash and liabilities (unearned revenue) when cash is received before revenue is earned; recognized as revenue over time as performance obligations are satisfied.
• Prepaid expenses — increase prepaid assets and decrease cash when payment is made in advance; recognized as expense over time (e.g., insurance, rent).