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Question		Answer
PERFORMANCE MEASURES start learning		PERFORMANCE MEASURES
Market value added ($ millions) start learning		market value of equity - book value of equity
Market-to-book ratio start learning		market value of equity / book value of equity
Price/Earnings (P/E) ratio start learning		market price per share / earnings per share
EVA ($ millions) start learning		(after-tax interest + net income) – (cost of capital x total capital)
Return on capital (ROC) start learning		(after-tax interest + net income) / total capital
Return on equity (ROE) start learning		net income / equity
Return on assets (ROA) start learning		(after-tax interest + net income) / total assets 1.
Return on assets (ROA) start learning		net income / total assets
EFFICIENCY MEASURES start learning		EFFICIENCY MEASURES
Asset turnover start learning		sales / total assets
Fixed asset turnover start learning		sales / fixed assets
Inventory turnover start learning		cost of goods sold / inventory
Days in inventory start learning		inventory / daily cost of goods sold
Receivables turnover start learning		sales / receivables
Average collection period (days) start learning		receivables / daily sales
(Net) Profit margin start learning		net income / sales
Operating profit margin start learning		(after-tax interest + net income) / sales
Operating profit margin 2 start learning		EBIT // sales
LEVERAGE MEASURES start learning		LEVERAGE MEASURES
Long-term debt ratio start learning		long-term debt / total capital
Long-term debt-equity ratio start learning		long-term debt / equity
(Total) debt ratio start learning		total liabilities / total assets
Times interest earned start learning		EBIT / interest payments
Cash coverage ratio start learning		(EBIT + depreciation) / interest payments
Leverage ratio start learning		total assets / equity
LIQUIDITY MEASURES start learning		LIQUIDITY MEASURES
Net-working-capital-to-total-assets start learning		(current assets – current liabilities) / total assets
Current ratio start learning		current assets / current liabilities
Quick ratio start learning		(cash + marketable securities + receivables) / current liabilities
Quick ratio start learning		(current assets-inventory) / current liabilities
Cash ratio start learning		(cash + marketable securities) / current liabilities

Financial ratios:

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