if we cant work it out with the info that we are given then look at what formula that info goes into
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what does the cash coverage ratio measure?
it deals with long term solvency. it tells us how much cash is left avaiable to pay the interest on a firms debts. the higher the number, the more times the firm can cover the interest owed
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why do we need ratios for more than 1 company?
to make sense of ratios you need to be able to compare and assess a firm relative to compartor firms or an industry, as diff industries have diff characteristics and operating norms
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ROS=
Profit before tax/sales - the higher this nubmer is the more profit the comp/div is.
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book value per share =
total eq/number of shares
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market to book ratio =
market price per share / book value per share
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book value of TA
PM X SALES X ROA
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How to find TAT when not given all info - example -
1. use du point 2. turn the info you do know / are given int0 decimals rather than % 3. then do ROE / the total of what you are given - you should then get the missing number
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equity mutliplyer?
TA / EQUITY
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Other cards in this set
Card 2
Front
what does the cash coverage ratio measure?
Back
it deals with long term solvency. it tells us how much cash is left avaiable to pay the interest on a firms debts. the higher the number, the more times the firm can cover the interest owed
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