Therefore, Apple Inc.’s debt-to-equity ratio, equity ratio, and debt ratio for the year 2018 were 1.07x, 0.29x, and 0.31x, respectively. Screenshot ofbalance sheetused for calculation Source Link:Apple Inc. Balance Sheet Explanation The formula for different gearing ratios can be derived by...
3. Average settlement period for AP = Average AP/Credit Purchases *365 Liquidity ratios 1. Current ratio = CA/CL 2. Liquid ratio = (CA- Prepayment-inventory)/CL Gearing ratios 1. Gearing = TL/TA 2. Gearing = TL/TE 3. Interest Cover ratio = Operating Profit/Interest Investor ratios...
EBITDA ➝ The proxy for operating cash flow, EBITDA, has been declining. Debt Balance ➝ The amount of total debt outstanding has remained constant (or potentially increased). From the perspective of lenders, a higher ratio of debt relative to its cash flow, assets, or equity indicates the...
We determine that Apple’s WACC is 10.96%. The industry average for the sector is 8.3% with 1.2% deviations. It indicates that Apple’s WACC is higher than the industry average. It further signifies that Apple pays a higher cost of capital to investors and lenders than the other companies ...
Gearing ratio measures a company’s financial leverage, the level of interest-bearing liabilities in its capital structure. It is most commonly calculated by dividing total debt by shareholders equity. Alternatively, it is also calculated by dividing tot
The Debt to Equity ratio (also called the “debt-equity ratio”, “risk ratio”, or “gearing”), is aleverage ratiothat calculates the weight of total debt and financial liabilities against totalshareholders’ equity. Unlike the debt-assets ratio which uses total assets as a denominator, the...
The most straightforward method of calculating EBITDA consists of adjusting operating income (EBIT) for non-cash add backs, namely for depreciation and amortization expense. However, other discretionary adjustments are often applied in practice, i.e. “Adjusted EBITDA”, which should be closely examine...
In a positive ROA, the company is earning income based on its investment in operating equipment. A lower or negative ROA isn't necessarily bad, however. If an auto manufacturer purchased a new large factory, its assets would go up but its net income for the period would remain steady, thu...
So, basic earnings per share should be adjusted for the effect of all the dilutive potential ordinary shares. 3. Cash EPS Cash EPS or more commonly operating cash flow per share measures the financial performance of the company. Free from non-cash items like depreciation which is included in ...
Businesses are aboutefficiency. Comparing profits to revenue is a useful operational metric, but comparing them to the resources a company used to earn them displays the feasibility of that company’s existence. Return on assets is the simplest of these corporate bang-for-the-buck measures. It ...