RatiosProfitability ratiosProfitability ratios measure the firm's use of its assets and con trol of its expe nses to gen erate an acceptable rate of return.Gross margin. Gross profit margin or Gross Profit RateGross ProfitNet SalesORS吐s - GOGSNet. SalesOperat ing margin, Operat ing In come Margin, Operat ing profit margin or Retur n on sales (ROS)Operating IncomeNet SalesNote: Operati ng in come is the differe nee betwee n operati ng reve nues and operat ing expe nses, but it is also sometimes used as a synonym for EBIT and operating profit. [10] This is true if the firm has no non-operati ng in come. (Ear nings before in terest and taxes / Sales)Profit margin, net margin or net profit marginNtit IncomeNet SalesReturn on equity (ROE)Net IncomeAverage SharcholdeTS EquityRetur n on in vestme nt (ROI ratio or Du Pont ratio)Net IncomeAverage Owmeis EquityRetur n on assets (ROA)Net IncomeTot EL I AssetsReturn on assets Du Pont (ROA Du Pont)(Net Income f Net Sales \ \Retur n on Equity Du Pon t (ROE Du Pont)(Xet Income\ / Net Sales A ( Average Assets\Net Sales / \ Average Assets J \ Average Equity JRetur n on n et assets (RONA)Not IncomeFixed Assets + Working CapitaiReturn on capital (ROC)N«t Operating Profit 一Adjusted Ta^esOwners EquityRisk adjusted return on capital (RAROC)Expoctod ReturnEconomic CapitalORExpccted Ret urnValue at RiskRetur n on capital employed (ROCE)Net IncomeCapital EmployedNote: this is somewhat similar to (ROI), which calculates Net In come per Owner's EquityCash flow return on in vestme nt (CFROI)C OB I I FlowMarket RecapitalisationEfficie ncy ratioXon-Int treat IncomeNet Interest Income + Non-Interest. IncomeNet geari ngdette nettefonds propresLiquidity ratiosLiquidity ratios measure the availability of cash to pay debt.Curre nt ratioCurrent. AssetsCurrent LiabilitiesAcid-test ratio (Quick ratio) [17]Current Assets - (Inventories + Pre payments )1Current. LiabilitiesOperation cash flow ratioOperation Cash FlowTotal DebtsActivity ratiosActivity ratios measure the effective ness of the firms use of resources.Average collect ion periodAccounts R-eceivablcAnnual Credit Sales H- 365 DaysDegree of Operat ing Leverage (DOL)Percent Change in Net Operating Income| Percent Change in SalosDSO RatioAcrounts RcccivabteTotal Annual Sales -4- 365 DaysAverage payme nt periodAccounts Payabl-eAnnual Credit Purchases 子365 Davs2 IAsset tur no verNet SalesTot al AssetsInven tory tur no ver ratioCOGSAverage InventoryReceivables Turno ver RatioXet Credit SalesAverage Net ReceivablesInven tory con vers ion ratio365 DaysIn\rntorv TumoveTdrInven tory con vers ion period(驛)___________________Receivables con vers ion period/Receivables \ _het Sales 365 DaySPayables con vers ion period{ Purges \ 65DavsAccounts Payable/Cash Con vers ion CycleInven tory Con vers ion Period + Receivables Con versi on Period - Payables Con vers ion PeriodDebt ratios (leveragi ng ratios)Debt ratios measure the firm's ability to repay Ion g-term debt. Debt ratios measure finan cial leverage.Debt ratioTotal Liabilities Total AssetsDebt to equity ratioLong-term Debt 十Value of LeasesAverage Shareholders EquityLong-term Debt to equity (LT Debt to Equity)Long-term DebtTotal AssetsTimes in terest-earned ratio_______ EBIT________Annual Interest ExpenseORNet- IncomeAnnual Interest ExpenseDebt service coverage ratioNet Operating IncomeTotal Debt ServiceMarket ratiosMarket ratios measure in vestor resp onse to owning a compa ny's stock and also the cost of issu ing stock.Earnings per share (EPS) Expected Earnings Numb ET of SharesPayout ratioDividpnckiEarningsORDivide nd£EPS~Divide nd cover (the in verse of Payout Ratio)Earnings per ShareDividend per ShareP/E ratioMarket Price per ShareDiluted EPSDivide nd yieldDividendCurrent Market. PriceCash flow ratio or Price/cash flow ratioMarket Price per SharePresent Value of Cash Flow per ShaiePrice to book value ratio (P/B or PBV)Market Price per ShareBalance Sheet Price per SharePrice/sales ratioMarket Price per ShareGross SalesPEG ratioPrice per EarnuigsA linual EPS Growth Other Market RatiosEV/EBITDAEnterprise ValueP EBITDAEV/SalesEnterprise \'alueNet SatesCost/ In come ratioSector-specific ratiosEV/capacity EV/output。