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) Statement of the Assignment:

Please prepare a comprehensive list of financial ratios . Writea brief explanation below each financial ratio, e.g. what does thefinancial ratio measures or what the significance of it is.

For example:

Current Ratio = Current Assist / Current Liabilities

Current ratio measures whether our current assets, ifliquidated, are sufficient to pay all of our current liabilities. ACR of 1.5, for example, shows that if we were to liquidate all ofour current assets, we will be able to cover 1.5x our currentliabilities, whereas a CR of 0.5 shows that liquidating our currentassets only covers half of our current liabilities.

THE FOLLOWING RATIONS ARE THE RATIONS I NEED. CAN I PLEASE GETAN ANSWER EACH ONE OF THEM. (EACH BULLET POINT) please explain eachration, its process and how each one of them it is used

• Total debt Ratio=Total assets – total equity / totalassets

• Debit equity ratio = total debt / totalequity

• Equity multiplier = total assets / totalequity

• Long term debt ratio = long term debt / long term +total equity

• Times interest earned ratio = EBIT /Interest

• Cash coverage ratio= EBIT + Depreciation /interest

  Asset management, Or turnover,measures

• Inventory turnover = Cost of goods sold /inventory

• Receivables Turnover = sales / accountsreceivable

• NWC turnover= sales / NWC

• Fixed asset turnover = sales/ net fixedassets

• Total asset turnover = sales/ total assets

Profitability measures

• Profit margin = Net income/ sales

• Return on Assets= Net income / total assets

• Return on equity = net income / totalequity

Market Value Measures

• EPS = net income/ Shares outstanding

• PE= price per share / earning per share

• Market to book ratio= market value per share / bookvalue per share

• Enterprise value= total market value of the stock + bookvalue of liabilities – cash

• EBITA Ration= enterprise value/ EBITDA

2)

Select one of the financial ratios LISTED. Write theformula for calculating it, and then explain how it is useful inanalyzing the financial health of the firm.

How would you use the ratio, how would you assesswhether it is at an appropriate level or if it should be improved,and if so, how would you improve it?