Accounts Payable

Definition: Amount owed to suppliers for goods and services purchased on credit.

Accounts Payable to Sales

Definition: % sales that is payable to suppliers. A very high percentage may suggest that the company has a liquidity problem.
Formula: Average Accounts Payable / Revenue

Accounts Receivable, net

Definition: Amount that the company anticipates to collect from accounts receivable.
Formula: Accounts Receivable - Allowance for Bad Debt,Net Accounts Receivable (prior year) - Net Accounts Receivable (current year)

Advertising & Sales

Definition: Expense item showing costs associated with advertising. Examples Include: promotion, publicity expenses.

Total Assets to Sales

Definition: % that signifies the level of assets used to generate sales.
Formula: Total Assets/Revenue

Capital Expenditures

Definition: Funds used by a company to acquire or upgrade physical assets.
Formula: {(Net Property, Plant and Equipment (beginning) - Net Property, Plant, & Equipment (ending) + Net Intangible Assets (beginning) - Net Intangible Assets (ending) + Net Depletable Assets (beginning) - Net Depletable Assets (ending) + Depreciation and Amortization for the current year}

Capital Expenditures to Sales

Definition: Ratio of Capital Expenditures to Sales used to measure operating efficiency
Formula: Capital Expenditures/Revenue

Cash

Definition: Current Assets made up of demand deposits and time & savings deposits.

Company Count in Anaylsis

Definition: Businesses Represented

Current Liabilities to Inventory

Formula: Current Liabilities / Inventory

Current Liabilities to Net Worth

Definition: This factor measures the level of short-term obligations relative to equity. A very high % for an established company suggests significant pressure on future cash flow.
Formula: Current Liabilities / Net Worth

Current Ratio

Definition: Measures company's ability to meet financial obligations. The ratio is expressed as the number of times current assets exceed current liabilities. A high ratio indicates that a company can pay its creditors. A number less than one indicates potential cash flow problems.
Formula: Current Assets / Current Liabilities

Days Accounts Receivable Outstanding

Definition: Average number of days it takes a company to receive payments on accounts receivable. If it is a high number there is a problem with collections while an extremely low number indicates that a company's credit policies may be too strict thus minimizing its chances for additional sales and profit.
Formula: (Average Net Accounts Receivable * 365) / (Revenue)

EBITDA to Sales

Definition: A measure of profitability. EBITDA is an acronym for "Earnings before Interest and Depreciation & Amortization Expense".>
Formula: (Operating Income + Depreciation and Amortization) / Revenue

Fixed Assets to Net Worth

Definition: A measure of the solvency of a firm, this ratio indicates the extent to which the company's cash if frozen in th eform of brick and mortar and machinery, and the extent to which funds are available for the firm's operations.
Formula: Fixed Assets / Net Worth

Gross Margin (or Gross Profit)

Definition: Amount by which sales Revenue exceeds cost of sales. A low gross margin indicates that the company should increase selling price and/or decrease its cost of sales. This is the top-line view of a company's product-related cost structure. It indicates profitability and is an important benchmark for analyzing competitive strengths or weaknesses. A high gross margin suggests the company will remain profitable in times of economic instability. It also indicates that the company is creditworthy and can be competitive since it can afford to be cut prices. If gross margin is on a downward trend, there may be inventory management.
Formula: Revenue - Cost of Sales

Interest Coverage

Definition: Multiple indicating number of times a company can cover its interest expense with the income earned. Therefore, it conveys whether a borrower is able to pay the interest expense when due. This is important in calculating a company's borrowing capacity and assessing the risk of additional borrowings
Formula: Operating Income/Interest Expense

Inventory

Definition: Amount of goods owned by a company that are going to be sold. Consists of raw materials, work in process, and finished goods.

Inventory Turnover

Definition: Multiple that calculates liquidity of inventory or the number of times the average inventory is converted into receivables or cash during the year.
Formula: Cost of Sales / Average Inventory

Net Profit after Tax

Definition: Profit produced during an accounting period after tax
Formula: Revenue + Non-operational Income - All Expenses and Taxes.

Net Income

Definition: After Tax Income
Formula: Pre-Tax Income - Income Taxes

Net Sales

Definition: Income from the sales of a company's goods or services.

Net Worth

Definition: Owner's claim on assets. Also known as stockholders' equity. Includes common stock, paid in capital, retained earnings, and treasury stock.
Formula: Total Assets - Total Liabilities
or:
Common Stock + Paid in Capital + Retained Earnings - Treasury Stock

Officers Compensation

Definition: Expenses for salaries, wages, stock bonuses, and bonds paid to officers of the company.

Operating Expenses

Definition: Cost not directly associated with production such as wages, gifts, officers compensation, direct payroll, employee benefits, pension expense, advertising sales, bad debts, contributions and gifts, rents paid, repairs, taxes paid, and depreciation and amortization.

Operating Income

Definition: Income derived from a company's primary business excluding the cost of sales and operating expenses.
Formula: Revenue - Cost of Sales - Operating Expenses

Other Non-Current Assets

Definition: Non-current assets other than Fixed assets
Formula: Net Depletable assets +Net Intangible Assets _investments + Other Assets (noncurrent)

Other Operating Expenses

Definition: Operating Expenses other than Officers compensation and Advertising and sales

Quick Ratio

Definition: Also known as the acid test ratio and indicates typical liquidity. Measures a company's ability to meet its short-term obligations using its most liquid assets.
Formula: (Cash + Marketable Securities + Receivables) / Current Liabilities

Pre-Tax Return on Assets

Definition: Indicates profit as a percentage of operating assets and measures the strength of a company's ability to manage and allocate resources.
Formula: Pre-tax Income/Assets

Pre-Tax Return on Net Worth (Return on Investments)

Definition: Calculates a company's investment return by the capital invested by shareholders.
Formula: Pre-tax Income/Net Worth

Pre-Tax Return on Sales

Definition: This ratio is widely used to evaluate a company's operational efficiency.
Formula: Pre-tax Income/Revenue

Working Capital to Sales

Definition: A measurement comparing the depletion of working capital to the generation of sales over a given period. This provides some useful information as to how effectively a company is using its working capital to generate sales
Formula: Working Capital/Sales, where Working Capital =Current Assets - Current Liabilities

Property, Plant & Equipment, net

Definition: Property Plant and Equipment minus accumulated Depreciation
Formula: Total Property, Plant and Equipment - Accumulated Depreciation

Total Assets

Definition: Total of items of economic value owned by the company.
Formula: Total Current Assets + Net Property, Plant and Equipment + Net Depletable Assets + Net Intangible Assets + Investments + Other Assets

Total Current Assets

Definition: Anything of value owned by a company that is potentially liquid or could be consumed within a year.
Formula: Cash + Marketable Securities + Net Accounts Receivable + Inventory + Other Current Assets Total Current Liabilities

Total Current Liabilities

Definition: Total financial obligations to be settled within one year.
Formula: Short Term Debt + Accounts Payable + Other Current Liabilities

Total Debt to Equity

Definition: Ratio of Total Liabilities to Net Worth
Formula: Total Liabilities/Net Worth

Total Fixed Assets

Definition: Total Property, Plant and Equipment

Total Debt to Assets (Total Liabilities to Net Worth)

Definition: Percentage of total assets financed with debt.
Formula: Total Liabilities / Total Assets

Total Long Term Liabilities

Definition: A company's liabilities due in more than one year.
Formula: Long Term Debt + Loans from Shareholders + Other Liabilities

Total Net Worth

Definition: This represents the combined owner's equity in the business.
Formula: Common Stock + Paid in Capital + Retained Earnings - Treasury Stock

Total Revenue

Definition: Income from sales of a company's goods or services.
Formula: Revenue + Other Revenue