## Equations

1. **Return on Assets** = Net Income/Total Assets

2. **Return on Stockholders Equity** = Net Income/(Assets – Liabilites)

3.** Asset Turnover Ratio** = Total Revenue/Total Assets

4. **Profit Margin (Return on Sales)** = Net Income/Total Revenue

5. **Gross Margin** = Total Revenue (Sales) – Cost of Goods Sold – Gross Margin Percentage = Gross Margin/Total Revenue (Sales)

6. **Net Income** = Total Revenue – Total Operating Expenses

7. **Total Equity** = Total Assets – Total Liabilities

8. **Return on Equity** = Net Income/Shareholder’s Equity

9. **Current Ratio** = Current Assets/Current Liabilities

10. **Current Assets**

- Cash and Cash Equivalents
- Accounts Receivable
- Inventory
- Marketable Securities
- Prepaid Expenses, etc. Learn More->

11.** Current Liabilities**

- Short Term Debt
- Accounts Payable
- Accrued Liabilities, etc. Learn More->

12. **Earnings Per Share** = (Net Income – Dividends on Preferred Stock)/Average Outstanding Shares

13. **Quick ratio (Acid Test)** = (current assets – inventories) / current liabilities, or = (cash and equivalents + marketable securities + accounts receivable) / current liabilities

14.** Return on Investment** = (Gain from Investment – Cost of Investment)/Cost of Investment

15.** Debt to Equity Ratio** =

- Total Liabilities / Shareholders’ Equity
- Total Liabilities / (Total Assets – Total Liabilities)

16.** Return on Sales (Profit Margin)** = Net Income (Before Interest and Tax)/Sales

17. **Working Capital** = Current Assets – Current Liabilities