Module 1-3: Profitability
Return on Equity (ROE)Net Income ÷ Average Equity
Return on Assets (ROA)Net Income ÷ Average Assets
Financial LeverageAverage Assets ÷ Average Equity
Profit MarginNet Income ÷ Sales
Asset TurnoverSales ÷ Average Assets
NOA: Net Operating AssetsOperating assets - Operating liabilities
NOPBT: Net Operating Profit Before TaxRevenue - Operating expenses including Cost of Goods Sold
NNE: Net Nonoperating Expense After TaxPretax net nonoperating expense × (1 - Tax%)
NOPAT: Net Operating Profit After Tax1. NOPBT - Tax on operating profit
2. Net income + NNE
RNOA: Return on Net Operating AssetsNOPAT ÷ Average Net Operating Assets
Module 4-5: Credit & Revenue
Times Interest Earned (TIE)EBIT ÷ Interest Expense
EBITDAEBIT + Depreciation + Amortization
Free Operating Cash Flow to Total Debt(Operating Cash Flow - CAPEX) ÷ Total Debt
Debt-to-EBITDATotal Debt ÷ EBITDA
Accounts Receivable TurnoverSales ÷ Average Accounts Receivable
Days Sales Outstanding (DSO)365 ÷ Accounts Receivable Turnover
Net Accounts ReceivableGross Accounts Receivable - Allowance for Doubtful Accounts
Percentage of Completion (Cost-to-Cost)Cumulative Costs Incurred ÷ Total Estimated Costs
Module 6-7: Assets & Liabilities
Inventory TurnoverCOGS ÷ Average Inventory
DIO (Days Inventory Outstanding)365 ÷ Inventory Turnover
PPE TurnoverRevenue ÷ Average Net PPE
Average Net PPE(Net PPE ending + Net PPE beginning) ÷ 2
Average Useful LifeAverage Gross PPE (Excl. Land/CIP) ÷ Depreciation Expense
Percent Used UpAccumulated Depreciation ÷ Total Gross PPE (Excl. Land/CIP)
Depreciation Expense (Straight-Line)(Cost - Salvage Value) ÷ Useful Life
Depreciation Expense (DDB)Beginning Book Value × (2 ÷ Useful Life)
Warranty ExpenseExpected failed units × Average repair cost
Warranty LiabilityBeginning Liability + Warranty Expense - Actual Claims/Repairs
Interest Expense (note)Principal × Rate × Time
Bond Issue PricePV of principal + PV of interest payments
Interest Expense (bond)Carrying value × market rate
Cash InterestFace value × stated rate
Discount/Premium AmortizationInterest expense - Cash interest
Average Interest Rate on DebtInterest expense ÷ Average debt
Times Interest Earned (TIE)Earnings Before Interest & Taxes (EBIT) ÷ Interest Expense