Quick shoutouts to CR, ATO, DR, ROA, ROE, P/E, TIE, BV/Share, and Payout ...

Quick shoutouts to CR, ATO, DR, ROA, ROE, P/E, TIE, BV/Share, and Payout:

• ​The Current Ratio is computed by dividing current assets by current liabilities. So, CR = CA/CL.
• Asset turnover is computed by dividing sales by average assets. So, ATO = Sales/Avg. A.
• Debt ratio is computed by dividing liabilities by assets. So, DR = L/A.
• Return on Assets is computed by dividing Net Income by average assets. So,  ROA = NI/Avg. A.
• Return on Equity is computed by dividing Net Income by average equity. So, ROE = NI/Avg. E.
• The price-earnings ratio is computed by dividing the market price per common share by earnings per share. Earnings per share is calculated by (net income minus preferred dividends) divided by average common shares. So, PE = Price/EPS; EPS = (NI-Pdiv)/ Avg. Common Shares.
• Times interested earned is computed by dividing income before interest expense and taxes by interest expense. So, TIE = EBIT/Interest X.
• Book Value per common share is computed by dividing common stockholder equity by the common shares outstanding. So, BV/ share = Equity/# of common shares.
• Payout ratio to shareholders is computed by dividing common dividends by (net income – preferred dividends). So, Payout = Div / (NI – Pdiv). 

cc: Reporting