Stock Days & Stockturn

Stock Days & Stockturn: is a company’s stocks in relation to annual sales expressed in a number of days.

Stock days = Stocks (inventory) X 365 / Sales

Stockturn = Sales/Stocks (more…)

Debtor Days & Creditor Days

Debtor Days & Creditor Days: are an important part of current assets and current liabilities. Debtors (accounts receivable) represent money owed to the company by customers. (more…)

Current Ratio & Acid Ratio

Current Ratio & Acid Ratio: are two ratios that demonstrate a company’s short-term liquidity. The current ratio compares current assets (normally stocks, debtors and cash) with current liabilities (bank overdrafts, money the company owes suppliers and taxes owed). (more…)

Interest Cover

Interest Cover: is a measure of the financial soundness of a company. It is the number of times the profit before interest exceeds the interest charge in the income statement. (more…)

Margins

Margins: profit margins are a measure of profitability found by dividing net profit (last line in the profit and loss statement) by total sales (turnover). (more…)

Return on Invested Capital (ROIC)

Return on Invested Capital (ROIC): or Return on Capital Employed is one of several financial ratios that compare profits to assets in a business. (more…)

Total Return

Total Return: Investors also should focus on what is called “Total Return”. The total return is the dividend yield via check a check in the mail plus the share price appreciation (if there was any) seen in the shares over the same period. (more…)

Dividend Yield

Dividend Yield: often simply called the “yield”, is an alternative way of assessing the value of a share. It is the percentage that the annual dividend paid to shareholders represents of the price. (more…)

Return on Average Equity

Return on Average Equity: is another ratio connecting the income statement to the balance sheet. It compares profits attributable to shareholders with assets owned by shareholders. (more…)

Price/Book Value

Price/Book Value: is the share price divided by the book value of the shares. Book value is the value of the net assets attributable to shareholders (also called net tangible assets, NTA, or stockholders’ equity per share). (more…)