2024-11-24 19:35:27 +02:00
|
|
|
#+title: Section 6 | Lesson 36 - Financial Rations, Leverage
|
2024-11-29 13:47:42 +02:00
|
|
|
#+HTML_HEAD: <link rel="stylesheet" type="text/css" href="../_share/media/css/business.css" />
|
2024-11-24 19:35:27 +02:00
|
|
|
|
|
|
|
|
* Links
|
2024-11-29 13:47:42 +02:00
|
|
|
- [[./../mba-main.org][TOC | Business]]
|
2024-11-25 19:54:16 +02:00
|
|
|
- [[https://www.udemy.com/course/an-entire-mba-in-1-courseaward-winning-business-school-prof/learn/lecture/4282978#overview][S06:L36 Financial Ratios]]
|
2024-11-24 19:35:27 +02:00
|
|
|
|
|
|
|
|
* Notes
|
2024-11-25 19:54:16 +02:00
|
|
|
|
|
|
|
|
** Liquidity Ratios
|
|
|
|
|
*** basics
|
|
|
|
|
- also called "Liquidity"
|
|
|
|
|
- measure our ability to pay short term debt
|
|
|
|
|
- get a loan
|
|
|
|
|
|
|
|
|
|
*** Current Ratio
|
|
|
|
|
- \( \text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}} \).
|
|
|
|
|
|
|
|
|
|
- if it is positive, then the banks think you can pay your bills
|
|
|
|
|
|
|
|
|
|
*** quick ratio
|
|
|
|
|
- \( \text{Quick Ratio} = \frac{\text{Current Ratio} - \text{inventory}}{\text{Current Liabilities}}\)
|
|
|
|
|
- used in case the inventory has to be discounted (ie the inventory just got recalled)
|
|
|
|
|
|
|
|
|
|
** Leverage Ratios
|
2024-11-25 19:54:32 +02:00
|
|
|
*** EBITDA
|
|
|
|
|
- *definition:* Earnings Before Interest Taxes, Depreciation and Amoritization
|
|
|
|
|
- *formula:*
|
|
|
|
|
- \( \text{EBITDA} = \text{Net Income} + \text{Interest} + \text{Taxes} + \text{Depreciation} + \text{Amoritization}\)
|
|
|
|
|
|
|
|
|
|
- \( \text{EBITDA} = \text{Operating Income} + \text{Depreciation} + \text{Amoritization}\)
|
|
|
|
|
|
|
|
|
|
*** Debt to total assets = debt / assets
|
|
|
|
|
*** Interest coverage = EBITDA / interest
|
2024-11-25 19:54:16 +02:00
|
|
|
- Earnings Before Interest Taxes Depreciation and Amoritization
|
