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