Step 1.
Balance per Bank Statement on Aug, 31. 2006
Adjustments:
Add: Deposits in transit
Deduct: Outstanding checks
Add or Deduct: Bank errors
Adjusted/Corrected Balance per
-----------------------------------------------------------------------------
Bank Step 2.
Balance per Books on Aug, 31 2006
Adjustments:
Deduct: Bank service charges
Deduct: NSF checks & fees
Deduct: Check printing charges
Add: Interest earned
Add: Notes Receivable collected by bank
Add or Deduct: Errors in company's Cash account
Adjusted/Corrected Balance per Books
---------------------------------------------------------------------------------
Liquidity Analysis Ratios
Current Ratio
Current Assets
Current Ratio = ------------------------
Current Liabilities
Quick Ratio
Quick Assets
Quick Ratio = ----------------------
Current Liabilities
Quick Assets = Current Assets - Inventories
Net Working Capital Ratio
Net Working Capital
Net Working Capital Ratio = --------------------------
Total Assets
Net Working Capital = Current Assets - Current Liabilities
Profitability Analysis Ratios
Return on Assets (ROA)
Net Income
Return on Assets (ROA) = ----------------------------------
Average Total Assets
Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2
Return on Equity (ROE)
Net Income
Return on Equity (ROE) = --------------------------------------------
Average Stockholders' Equity
Average Stockholders' Equity
= (Beginning Stockholders' Equity + Ending Stockholders' Equity) / 2
Return on Common Equity (ROCE)
Net Income
Return on Common Equity (ROCE) = --------------------------------------------
Average Common Stockholders' Equity
Average Common Stockholders' Equity
= (Beginning Common Stockholders' Equity + Ending Common Stockholders' Equity) / 2
Profit Margin
Net Income
Profit Margin = -----------------
Sales
Earnings Per Share (EPS)
Net Income
Earnings Per Share (EPS) = ---------------------------------------------
Number of Common Shares Outstanding
Activity Analysis Ratios
Assets Turnover Ratio
Sales
Assets Turnover Ratio = ----------------------------
Average Total Assets
Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2
Accounts Receivable Turnover Ratio
Sales
Accounts Receivable Turnover Ratio = -----------------------------------
Average Accounts Receivable
Average Accounts Receivable
= (Beginning Accounts Receivable + Ending Accounts Receivable) / 2
Inventory Turnover Ratio
Cost of Goods Sold
Inventory Turnover Ratio = ---------------------------
Average Inventories
Average Inventories = (Beginning Inventories + Ending Inventories) / 2
Capital Structure Analysis Ratios
Debt to Equity Ratio
Total Liabilities
Debt to Equity Ratio = ----------------------------------
Total Stockholders' Equity
Interest Coverage Ratio
Income Before Interest and Income Tax Expenses
Interest Coverage Ratio = -------------------------------------------------------
Interest Expense
Income Before Interest and Income Tax Expenses
= Income Before Income Taxes + Interest Expense
Capital Market Analysis Ratios
Price Earnings (PE) Ratio
Market Price of Common Stock Per Share
Price Earnings (PE) Ratio = ------------------------------------------------------
Earnings Per Share
Market to Book Ratio
Market Price of Common Stock Per Share
Market to Book Ratio = -------------------------------------------------------
Book Value of Equity Per Common Share
Book Value of Equity Per Common Share
= Book Value of Equity for Common Stock / Number of Common Shares
Dividend Yield
Annual Dividends Per Common Share
Dividend Yield = ------------------------------------------------
Market Price of Common Stock Per Share
Book Value of Equity Per Common Share
= Book Value of Equity for Common Stock / Number of Common Shares
Dividend Payout Ratio
Cash Dividends
Dividend Payout Ratio = --------------------
Net Income
ROA = Profit Margin X Assets Turnover Ratio
ROA = Profit Margin X Assets Turnover Ratio
Net Income Net Income Sales
ROA = ------------------------ = -------------- X ------------------------
Average Total Assets Sales Average Total Assets
Profit Margin = Net Income / Sales
Assets Turnover Ratio = Sales / Averages Total Assets
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