The quality of income ratio or earnings quality ratio can be used to indicate that the net income of a business demonstrates high quality characteristics such as, for example, being cash backed, predictable, recurring and conservative.
Tag: Ratio Formula
Cash Flow Ratios Calculator
Cash Flow Ratio Analysis
Days Sales Outstanding
Operating Leverage Ratio Analysis
The operating leverage shows the level of fixed cost leverage within a business, and the degree of operating leverage shows the impact of the cost structure on the operating income of the business.
The operating income for a business with high leverage can change dramatically for a given change in the number of units sold, and its earnings are said to be more volatile and therefore more risky
Return on Assets ROA
ROCE – Return on Capital Employed
Inventory Days
Creditor Days Ratio in Accounting
Net Profit Ratio
Return on Sales
The return on sales is the operating income of the business expressed as a percentage of the revenue. It is a measure of the level of true income a business generates on its sales. It is calculated by dividing operating income by revenue. Operating income is the same as earnings before interest and tax (EBIT), otherwise called profit before interest and tax (PBIT).
Interest Coverage Ratio
The interest coverage ratio measures the amount of earnings a business has to make interest payments. It is calculated by dividing the profit before interest and tax by the interest expense. It is sometimes called the interest cover ratio or simply interest coverage or interest cover.