Financial Statements

         Gross Profit Margin = Gross Profit                                        Net Revenue The Gross Profit Margin expresses g...

This multiple compares total debt to one year’s worth of Earnings before Interest, Taxes, Depreciation, and Amortization (or “EBITDA”).   EB...

As discussed in the previous post, an analyst may want to exclude intangible assets from the calculation of net equity when constructing a d...

"Leverage" measures the extent to which debt is used to finance a business.   Higher leverage results from greater proportions...

          Accounts Payable Turnover =     Cost of Goods Sold                                                               Accounts Pa...

          Inventory Turnover = Cost of Goods Sold                                                 Inventory Inventory turnover re...

“Activity ratios” measure "turnover" or the rates at which current assets and current liabilities are used-up or paid-off throug...