Financial ratios in financial statements

LIQUIDITY RATIOS
Net working capital
the difference between a company’s current assets and current liabilities on its balance sheet. It is a measure of a company’s liquidity and its ability to meet short-term obligations, as well as fund operations of the business.
Net working capital = Current Assets – Current Liabilities
Net working capital = Accounts Receivable + Inventory – Accounts Payable
Earnings per share (EPS)
It is common for a company to report EPS that is adjusted for extraordinary items and potential share dilution. The higher a company's EPS, the more profitable it is considered to be. The earnings per share value is calculated as the net income (also known as profits or earnings) divided by the available shares.
Earnings per Share = (Net Income – Dividends on Preffered Stock) / Average Outstanding Shares
Dividend Payout Ratio
the ratio of the total amount of dividends paid out to shareholders relative to the net income of the company. It is the percentage of earnings paid to shareholders in dividends. The amount that is not paid to shareholders is retained by the company to pay off debt or to reinvest in core operations.
Dividend Payout Ratio = Dividends Paid / Net Income
Dividend Payout Ratio = 1−Retention Ratio
MARKET VALUE RATIOS
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