Liquity

Current Ratio = Current assets/ Current liabilities

A liquidity ratio that measures a company's ability to pay short-term obligations.

Quick Ratio = Current assets Inventory / Current liabilities

The quick ratio measures a companys ability to meet its short-term obligations with
its most liquid assets.

Average Collection Period = Acct Receivable / Average sales per day, (Average sales per day =
Annual Sales/365)

The approximate amount of time that it takes for a business to receive payments
owed, in terms of receivables, from its customers and clients.

Inventory Turnover = Cost of goods sold/Inventory

# of days = 365/Inventory turnover

A ratio showing how many times a company's inventory is sold and replaced over a
period.
Profitability & Activity

Total Assets Turnover = Sales / Total Assets

The amount of sales or revenues generated per dollar of assets. The Asset Turnover
ratio is an indicator of the efficiency with which a company is deploying its assets.

Fixed Assets Turnover = Sales / Fixed Assets

Operating Return on Assets = Operating profits / Total Assets

Operating return on assets indicates the companys operating income generated per
dollar invested in total assets.

Operating Profit Margin = Operating profit / Sales

Operating margin is a measurement of what proportion of a company's revenue is left

over after paying for variable costs of production such as wages, raw materials, etc. A
healthy operating margin is required for a company to be able to pay for its fixed
costs, such as interest on debt.

Gross Profit Margin = Gross Profit/Sales

A financial metric used to assess a firm's financial health by revealing the proportion
of money left over from revenues after accounting for the cost of goods sold. Gross
profit margin serves as the source for paying additional expenses and future savings.

Operating Profit Margin = EBIT / Sales

Net Profit Margin = Earnings Available to Common Stockholders/ Sales

The percentage of revenue remaining after all operating expenses, interest, taxes and
preferred stock dividends (but not common stock dividends) have been deducted from
a company's total revenue.

Return on Equity = Net Income/ Common Equity

Common Equity includes both common stock and retained earnings

The amount of net income returned as a percentage of shareholders equity. Return on

equity measures a corporation's profitability by revealing how much profit a company
generates with the money shareholders have invested.

Debt Ratio = Total debt/ Total Assets

A financial ratio that measures the extent of a companys or consumers leverage. The
debt ratio is defined as the ratio of total debt to total assets, expressed in percentage,
and can be interpreted as the proportion of a companys assets that are financed by
debt.

Times Interest Earned = Operating Income/Interest

A metric used to measure a company's ability to meet its debt obligations. It is

calculated by taking a company's earnings before interest and taxes (EBIT) and
dividing it by the total interest payable on bonds and other contractual debt. It is
usually quoted as a ratio and indicates how many times a company can cover its
interest charges on a pretax basis. Failing to meet these obligations could force a
company into bankruptcy.
Perception

Price Earning = Price per share/ Earnings per share

Net Income Dividends on preferred Stocks / Average outstanding Shares

A valuation ratio of a company's current share price compared to its per-share

earnings.

Price to Book = Price per share / Equity book value per share

A ratio used to compare a stock's market value to its book value. It is calculated by
dividing the current closing price of the stock by the latest quarter's book value per
share.

OFICIAL (INVESTOPEDIA) ratio used to compare a stock's market value to its

book value. It is calculated by dividing the current closing price of the stock by the
latest quarter's book value per share.
Also known as the "price-equity ratio".

Calculated as:

Equity Book value per share = Common equity/ Common Stock Outstanding
Common Equity = Common Stocks + Retaining Earnings

A financial measure that represents a per share assessment of the minimum value of a
company's equity. More specifically, this value is determined by relating the original
value of a firm's common stock adjusted for any outflow (dividends and stock
buybacks) and inflow (retained earnings) modifiers to the amount of shares
outstanding.

Debt-to-Capital Ratio =Debt/Shareholders Equity + Debt

A measurement of a company's financial leverage, calculated as the company's debt

divided by its total capital. Debt includes all short-term and long-term obligations.
Total capital includes the company's debt and shareholders' equity, which includes
common stock, preferred stock, minority interest and net debt.

Diversification - http://www.investopedia.com/articles/05/021105.asp