Everyone can do with understanding the basics of Finance. Same is applicable for me too! :)
| Sr. No. | Term | Meaning |
| 1 | Liquidity Ratio | It shows the ability of a firm to pay its short term debts as they mature |
| 2 | Current Ratio | Current Assets / Current Liabilities |
| 3 | Quick Ratio (Acid-test) | Quick assets / Current Liabilities where, quick assets = current assets - inventory |
| 4 | Profitability Ratio | It is used to measure a firm's efficiency & ability to generate profits |
| 5 | Gross Profit margin | Gross profit / Sales |
| 6 | Net Profit margin | Net Profit (PAT) / Sales |
| 7 | Ownership Ratio | This helps to analyze the present and future investments in a firm & to compare the investments with factors such as Debt, Earnings, Dividends & Stock price |
| 8 | Return on Equity or Net Worth (RONW) | RONW = Net Profit / Avg. Equity |
| 9 | Earnings Per Share (EPS) | EPS = Net profit / No. of shares outstanding |
| 10 | Price Earnings Ratio (P/E) | P/E = Market price of shares / EPS |
| 11 | Debt Equity Ratio | Total debt / Total Equity |
| 12 | Debt Service Coverage Ratio | (PAT + Depreciation + Non cash expenses + interest on loans) / (interest on loans + Repayments) |
| 13 | Average Net Funds Employed (ANFE) | ANFE = Average Net Working Capital + Average Net Fixed Assets |
| 14 | Return On Capital Employed (ROCE) | ROCE = (PBIT - TAX) / ANFE |
| 15 | Economic Value Added (EVA) | EVA = (ROCE - WACC) x ANFE |
For further reading: http://www.dsm.com/en_US/html/invest/glossary.htm
No comments:
Post a Comment