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Please list the formula and definition of each term Times interest earned = Free cash flow...

Please list the formula and definition of each term

Times interest earned =

Free cash flow =

Profitability ratios =

Earnings per share =

Price-earnings ratio =

Gross profit rate =

Profit margin =

Return on assets =

Asset turnover =

Payout ratio =

Return on common stockholders’ equity=

Liquidity ratios measure

Working capital =

Current ratio =

Current cash debt coverage =

Inventory turnover =

Days in inventory =

Accounts receivable turnover =

Average collection period =

Solvency ratios=

Debt to assets ratio =

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Answer #1

First 4 questions are being answered here.

1. Formula for times interest earned ratio is:

Times interest earned ratio = Income before interest and taxes / Interest expense

This ratio tells the number of times the operating income is sufficient to cover the interest payments on its debt.

2. Formula for free cash flow is:

Free Cash flow = Cash from operations - Capital expenditure

Free cash represents the amount of cash generated by a business after paying for its capital expenditure purchases.

3. Profitability ratios indicate the rate of profit earned by a business. They show what the profit is being earned by a firm per unit of sales. Examples of profitability ratios are Net margin or profit ratio, Return on assets, return on equity etc.

Formula for profitability ratios (Net Profit / margin ratio) is:

Net profit / margin ratio = Net income / Net Sales * 100

4. Formula for earnings per share is:

Earnings per share (EPS) = Net income / Common shares outstanding

It shows the earnings per common share outstanding.

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