## Blog / Managerial Accounting

# Financial Metrics: Formula Cheat Sheet

Aug 14, 2023

# Financial Metrics & Ratios: Formula Cheat Sheet

Table of Contents:

Growth Metrics

Profitability Metrics

Liquidity Metrics

Solvency Metrics

Efficiency Metrics

Cost Metrics

Valuation Metrics

Cash Flow Metrics

Coverage Metrics

Employee Metrics

Customer Metrics

Project Metrics

Supply Chain Metrics

Risk and Return Metrics

Market Share Metrics

## Growth Metrics

**Revenue Growth Rate** = (Current Period Revenue - Previous Period Revenue) / Previous Period Revenue

**Earnings Growth Rate **= (Current Period Earnings - Previous Period Earnings) / Previous Period Earnings

**Compound Annual Growth Rate (CAGR)**** **= [(Ending Value/Beginning Value) ^ (1/Number of Years)] - 1

**Customer Growth Rate **= (Number of Customers at End of Period - Number of Customers at Start of Period) / Number of Customers at Start of Period

**Net Profit Margin Growth **= (Current Period Net Profit Margin - Previous Period Net Profit Margin) / Previous Period Net Profit Margin

**Earnings Before Interest and Taxes (EBIT)**** Growth Rate **= (Current Period EBIT - Previous Period EBIT) / Previous Period EBIT

**Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)**** Growth Rate **= (Current Period EBITDA - Previous Period EBITDA) / Previous Period EBITDA

**Operating Income Growth Rate **= (Current Period Operating Income - Previous Period Operating Income) / Previous Period Operating Income

**Earnings Per Share (EPS) Growth Rate **= (Current Period EPS - Previous Period EPS) / Previous Period EPS

**Dividend Growth Rate **= (Current Period Dividend - Previous Period Dividend) / Previous Period Dividend

**Free Cash Flow**** Growth Rate **= (Current Period Free Cash Flow - Previous Period Free Cash Flow) / Previous Period Free Cash Flow

**Retained Earnings Growth Rate **= (Current Period Retained Earnings - Previous Period Retained Earnings) / Previous Period Retained Earnings

**Asset Growth Rate **= (Total Assets at End of Period - Total Assets at Start of Period) / Total Assets at Start of Period

**Equity Growth Rate **= (Total Equity at End of Period - Total Equity at Start of Period) / Total Equity at Start of Period

## Profitability Metrics

**Gross Profit**** Margin** = Gross Profit / Revenue * 100

**Operating Profit Margin** = Operating Profit / Revenue * 100

**Net Profit Margin** = Net Profit / Revenue * 100

**Return on Assets (ROA)** = Net Income / Average Total Assets

**Return on Equity (ROE)** = Net Income / Average Shareholder's Equity

**Return on Investment (ROI)** = (Gain from Investment - Cost of Investment) / Cost of Investment

**Earnings Before Interest and Taxes (EBIT)**** Margin** = EBIT / Revenue

**Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)**** Margin** = EBITDA / Revenue

**Operating Ratio** = Operating Expenses / Revenue

**Contribution Margin** = (Sales - Variable Costs) / Sales

**Price Earnings Ratio (P/E Ratio)** = Market Price per Share / Earnings per Share

**Earnings per Share (EPS)** = (Net Income - Dividends on Preferred Stock) / Average Outstanding Shares

**Cash Return on Assets (Cash ROA)** = Cash Flow from Operations / Total Assets

**Cash Return on Capital Invested (CROCI)** = (Cash Flow from Operations - Depreciation) / (Total Assets - Current Liabilities)

**Return on Sales (ROS)** = Net Income / Sales

**Return on Capital Employed (ROCE)** = EBIT / (Total Assets - Current Liabilities)

**Return on Invested Capital (ROIC)** = (Net Income - Dividends) / (Debt + Equity)

**Return on Research Capital (RORC)** = (Gross Profit - R&D Expense) / R&D Expense

**Asset Turnover Ratio** = Sales / Average Total Assets

**Equity Multiplier** = Total Assets / Total Equity

## Liquidity Metrics

**Current Ratio**** **= Current Assets / Current Liabilities

**Quick Ratio (or Acid-Test Ratio)**** **= (Current Assets - Inventory) / Current Liabilities

**Cash Ratio**** **= Cash and Cash Equivalents / Current Liabilities

**Operating Cash Flow Ratio**** **= Operating Cash Flow / Current Liabilities

**Net Working Capital**** **= Current Assets - Current Liabilities

**Days Sales Outstanding (DSO)**** **= (Accounts Receivable / Total Credit Sales) x Number of Days

**Days Payable Outstanding (DPO)**** **= (Accounts Payable / Cost of Goods Sold) x Number of Days

**Days Inventory Outstanding (DIO)**** **= (Average Inventory / Cost of Goods Sold) x Number of Days

**Cash Conversion Cycle (CCC)**** **= DSO + DIO - DPO

## Solvency Metrics

**Debt to Equity Ratio** = Total Liabilities / Shareholder's Equity

**Debt Ratio** = Total Liabilities / Total Assets

**Equity Ratio** = Shareholder's Equity / Total Assets

**Times Interest Earned Ratio (Interest Coverage Ratio)** = Earnings Before Interest and Taxes (EBIT) / Interest Expense

**Fixed Charge Coverage Ratio** = (EBIT + Lease Payments) / (Interest Expense + Lease Payments)

**Cash Flow to Debt Ratio** = Operating Cash Flow / Total Debt

## Efficiency Metrics

**Inventory Turnover** = Cost of Goods Sold / Average Inventory

**Receivables Turnover** = Net Credit Sales / Average Accounts Receivable

**Payables Turnover** = Cost of Goods Sold / Average Accounts Payable

**Asset Turnover** = Net Sales / Average Total Assets

**Fixed Asset Turnover** = Net Sales / Average Net Fixed Assets

**Working Capital Turnover** = Net Sales / Average Working Capital

**Equity Turnover** = Net Sales / Average Shareholders' Equity

**Days Sales Outstanding (DSO)** = (Average Accounts Receivable / Net Credit Sales) x Number of Days in Period

**Days Inventory Outstanding (DIO****)** = (Average Inventory / Cost of Goods Sold) x Number of Days in Period

**Days Payable Outstanding (DPO)** = (Average Accounts Payable / Cost of Goods Sold) x Number of Days in Period

**Cash Conversion Cycle (CCC)** = DIO + DSO - DPO

## Cost Metrics

**Cost of Goods Sold (COGS)** = Beginning Inventory + Purchases + Additional Costs - Ending Inventory

**Total Cost **= Fixed Costs + Variable Costs

**Variable Cost **= Variable Cost per Unit x Number of Units Produced

**Fixed Cost**: No specific formula as fixed costs remain constant regardless of the production volume.

**Average Cost (or Average Total Cost) **= Total Cost / Number of Units Produced

**Marginal Cost **= Change in Total Cost / Change in Quantity Produced

**Direct Costs: **These are costs that can be directly attributed to a product or service. Examples include raw materials and labor costs for production. The calculation would depend on the specific costs being considered.

**Indirect Costs (or Overhead Costs)** These are costs that are not directly tied to a specific product or service but are necessary for the business. Examples include rent, utilities, and salaries of non-production employees. The calculation would depend on the specific costs being considered.

**Operating Costs (or Operating Expenses) **= COGS + Operating Expenses (like rent, salaries, utilities, etc.)

**Sunk Cost: **A cost that has already been incurred and cannot be recovered. It's not calculated but rather recognized as a past expense.

**Opportunity Cost: **The value of the next best alternative that is forgone when a decision is made. It's a conceptual metric and doesn't have a standard formula, as it depends on the specific alternatives being considered.

**Break-even Point (in units)** = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)

**Break-even Point (in sales) **= Break-even Point (in units) x Selling Price per Unit

## Valuation Metrics

**Price-to-Earnings (P/E) Ratio** = Market Price per Share / Earnings per Share (EPS)

**Price-to-Sales (P/S) Ratio** = Market Capitalization / Total Sales (or Revenue)

**Price-to-Book (P/B) Ratio** = Market Price per Share / Book Value per Share

**Dividend Yield** = Annual Dividends per Share / Market Price per Share

**Enterprise Value (EV)** = Market Capitalization + Total Debt - Cash and Cash Equivalents

**EV/EBITDA (Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization)** = Enterprise Value / EBITDA

**EV/Sales (Enterprise Value to Sales)** = Enterprise Value / Total Sales (or Revenue)

**EV/EBIT (Enterprise Value to Earnings Before Interest and Taxes)** = Enterprise Value / EBIT

**Price-to-Earnings Growth (PEG) Ratio** = P/E Ratio / Annual EPS Growth Rate

**Price-to-Free Cash Flow** = Market Capitalization / Free Cash Flow

**Price-to-Operating Cash Flow** = Market Capitalization / Operating Cash Flow

**Market Value to Replacement Cost (Tobin's Q)** = (Market Value of Debt + Market Value of Equity) / (Replacement Cost of Total Assets)

## Cash Flow Metrics

**Operating Cash Flow (OCF)** = Net Income + Non-Cash Expenses (like Depreciation and Amortization) - Changes in Working Capital

**Free Cash Flow (FCF)** = Operating Cash Flow - Capital Expenditures

**Free Cash Flow to Equity (FCFE)** = Net Income - Net Capital Expenditure - Change in Net Working Capital + New Debt - Debt Repayment

**Free Cash Flow to the Firm (FCFF)** = EBIT x (1 - Tax Rate) + Depreciation & Amortization - Changes in Working Capital - Capital Expenditures

**Cash Flow from Investing Activities: **This is typically derived from the cash flow statement and includes cash inflows and outflows from investments like purchase or sale of long-term assets and other investments.

**Cash Flow from Financing Activities: **This is also derived from the cash flow statement and includes cash inflows and outflows from financing activities like issuing or buying back stock, borrowing, or repaying debt.

**Net Change in Cash** = (Cash Flow from Operating Activities) + (Cash Flow from Investing Activities) + (Cash Flow from Financing Activities)

**Cash Flow Margin** = Operating Cash Flow / Net Sales

**Cash Flow Return on Investment (CFROI)** = Cash Flow from Operations / (Total Assets - Current Liabilities)

**Cash Flow per Share** = Operating Cash Flow / Number of Shares Outstanding

## Coverage Metrics

**Interest Coverage Ratio**** **= Earnings Before Interest and Taxes (EBIT) / Interest Expense

**Debt Service Coverage Ratio (DSCR)**** **= Net Operating Income / Total Debt Service

**Fixed Charge Coverage Ratio **= (EBIT + Lease Payments) / (Interest Expense + Lease Payments)

**Cash Coverage Ratio **= (EBIT + Depreciation) / Interest Expense

**Asset Coverage Ratio **= (Total Assets - Intangible Assets) / Total Debt

**Times Interest Earned Ratio **= EBIT / Interest Expense

**Cash Flow to Debt Ratio **= Operating Cash Flow / Total Debt

## Employee Metrics

**Employee Turnover Rate **= (Number of employees who left during the period / Average number of employees during the period) x 100

**Cost Per Hire** = Total recruitment costs / Number of hires in a given period

**Average Training Cost Per Employee **= Total training costs / Number of employees trained

**Revenue Per Employee **= Total revenue / Average number of employees during the period

**Profit Per Employee **= Net profit / Average number of employees during the period

**Overtime Expense **= Number of overtime hours x Overtime hourly rate

**Employee Productivity **= Output or revenue produced / Number of employees

**Compensation Ratio **= Total compensation (salaries, benefits, bonuses) / Total revenue

**Benefits Cost Per Employee **= Total cost of employee benefits / Average number of employees during the period

**Absenteeism Rate **= (Number of days absent / (Number of employees x Number of workdays)) x 100

**Utilization Rate** (common in consulting or service industries)** **= (Billable hours / Total working hours) x 100

**Employee Satisfaction Index **= (Number of satisfied responses / Total number of responses) x 100

**Employee Engagement Rate **= (Number of engaged responses / Total number of responses) x 100

## Customer Metrics

**Customer Acquisition Cost (CAC)** = Total cost spent on acquiring new customers / Number of customers acquired

**Customer Lifetime Value (CLTV or LTV)** = (Average purchase value x Average purchase frequency) x Average customer lifespan

**Customer Retention Rate** = (Number of customers at the end of the period - Number of new customers during the period) / Number of customers at the start of the period x 100%

**Churn Rate (or Attrition Rate)** = (Number of customers lost during the period / Number of customers at the start of the period) x 100%

**Net Promoter Score (NPS)** = % of Promoters - % of Detractors Note: Promoters are customers who rate the business 9 or 10 out of 10, and Detractors are those who rate it 0 to 6.

**Average Revenue Per User (ARPU)** = Total revenue / Number of users

**Customer Profitability Score** = Customer Profitability Score = Net profit from a customer / Total revenue from that customer x 100%

**Customer Concentration** = Customer Concentration = Revenue from a specific customer / Total revenue x 100%

**Customer Equity** = Sum of CLTV of all customers

**Customer Payback Period** = CAC / (Gross margin per customer x Monthly transactions per customer)

**Customer Referral Rate** = Number of new customers acquired through referrals / Total number of new customers x 100%

**Customer Satisfaction Score (CSAT)** = (Number of satisfied customers / Total number of survey respondents) x 100%

## Project Metrics

**Net Present Value (NPV)** = Sum of (Cash inflow for period t / (1 + r)^t) - Initial Investment Where:

t = time period (e.g., year 1, year 2, etc.)

r = discount rate

**Internal Rate of Return (IRR): **The IRR is the discount rate (r) at which NPV = 0. It's typically solved using iterative methods or software, as it's not a straightforward formula.

**Payback Period** = Time taken for the cumulative cash inflows to equal the initial investment

**Discounted Payback Period** = Time taken for the cumulative discounted cash inflows to equal the initial investment

**Profitability Index (PI)** = Present Value of Future Cash Flows / Initial Investment

**Return on Investment (ROI)** = (Net Profit from the Project / Cost of the Project) x 100%

**Benefit-Cost Ratio (BCR)** = Total Expected Benefits / Total Expected Costs

**Earnings Before Interest and Taxes (EBIT)** = Revenue - Operating Expenses (excluding interest and taxes)

**Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)** = Revenue - Operating Expenses (excluding interest, taxes, depreciation, and amortization)

**Break-Even Point** = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)

**Sensitivity Analysis**: This isn't a formula per se, but a method. It involves changing one variable at a time (e.g., discount rate, project costs, expected revenues) to see how sensitive the project's NPV or other metrics are to changes in that variable.

**Scenario Analysis**: Like sensitivity analysis, scenario analysis doesn't have a specific formula. It involves evaluating a project under different scenarios (e.g., best case, worst case, most likely case) to understand potential outcomes and risks.

## Supply Chain Metrics

**Inventory Turnover** = Cost of Goods Sold / Average Inventory

**Days Inventory Outstanding (DIO)** = (Average Inventory / Cost of Goods Sold) x 365

**Days Sales Outstanding (DSO)** = (Accounts Receivable / Total Revenue) x 365

**Days Payable Outstanding (DPO)** = (Accounts Payable / Cost of Goods Sold) x 365

**Cash Conversion Cycle (CCC)** = DIO + DSO - DPO

**Fill Rate** = (Number of Orders Fulfilled / Total Number of Orders) x 100

**Stockout Rate** = (Number of Stockouts / Total Number of Orders) x 100

**Order Lead Time** = Date Goods Received - Date Order Placed

**Inventory Carrying Cost** = (Average Inventory Value x Carrying Cost Percentage) / Time Period

**Return on Assets (ROA) for Supply Chain** = Net Income / Average Total Assets

**Supply Chain Operating Cost as a Percentage of Sales** = (Total Supply Chain Costs / Total Sales) x 100

**Perfect Order Rate** = (Number of Perfect Orders / Total Number of Orders) x 100

**Freight Cost as a Percentage of Sales** = (Total Freight Costs / Total Sales) x 100

**Average Inventory Level** = (Beginning Inventory + Ending Inventory) / 2

**Order Accuracy Rate** = (Number of Accurate Orders / Total Number of Orders) x 100

## Risk and Return Metrics

**Expected Return** Calculation: Sum of (Probability of each return * Corresponding return)

**Variance **= Sum of [Probability of each return * (Return - Expected Return)^2]

**Standard Deviation (Volatility) **= Square root of Variance

**Beta (β) **= Covariance(Return of the asset, Return of the market) / Variance(Return of the market)

**Alpha (α) **= Actual Return - [Risk-free rate + Beta * (Market Return - Risk-free rate)]

**Sharpe Ratio **= (Expected Return of the asset - Risk-free rate) / Standard Deviation of the asset's return

**Sortino Ratio **= (Expected Return of the asset - Risk-free rate) / Standard Deviation of the negative asset return

**Treynor Ratio **= (Expected Return of the asset - Risk-free rate) / Beta

**R-squared (R^2) **= Square of the correlation between the asset's returns and the market's returns

**Information Ratio **= (Return of the portfolio - Return of the benchmark) / Tracking Error

**Tracking Error **= Standard Deviation of (Portfolio returns - Benchmark returns)

**Maximum Drawdown **= Maximum peak-to-trough decline in the value of a portfolio or asset

**Value at Risk (VaR) **= Maximum potential loss at a given confidence level over a specific time horizon

**Conditional Value at Risk (CVaR) or Expected Shortfall **= Expected loss given that the loss is beyond the VaR level

## Market Share Metrics

**Market Share by Units **= (Number of Units Sold by the Company / Total Units Sold in the Market) x 100%

**Market Share by Revenue **= (Company's Sales Revenue / Total Sales Revenue in the Market) x 100%

**Relative Market Share **= Company's Market Share / Largest Competitor's Market Share

**Market Concentration **= Sum of the Market Shares of the Top N Companies (often used for the top 3, 4, or 5 companies)

**Market Share Growth **= ((Market Share in Current Period - Market Share in Previous Period) / Market Share in Previous Period) x 100%

**Gain or Loss in Market Share **= Market Share in Current Period - Market Share in Previous Period

**Share of Wallet **= (Company's Sales to a Specific Customer / Total Expenditure by that Customer) x 100%

**Share of Segment **= (Company's Sales in a Specific Segment / Total Sales in that Segment) x 100%

# Financial Metrics & Ratios: Formula Cheat Sheet

Table of Contents:

Growth Metrics

Profitability Metrics

Liquidity Metrics

Solvency Metrics

Efficiency Metrics

Cost Metrics

Valuation Metrics

Cash Flow Metrics

Coverage Metrics

Employee Metrics

Customer Metrics

Project Metrics

Supply Chain Metrics

Risk and Return Metrics

Market Share Metrics

## Growth Metrics

**Revenue Growth Rate** = (Current Period Revenue - Previous Period Revenue) / Previous Period Revenue

**Earnings Growth Rate **= (Current Period Earnings - Previous Period Earnings) / Previous Period Earnings

**Compound Annual Growth Rate (CAGR)**** **= [(Ending Value/Beginning Value) ^ (1/Number of Years)] - 1

**Customer Growth Rate **= (Number of Customers at End of Period - Number of Customers at Start of Period) / Number of Customers at Start of Period

**Net Profit Margin Growth **= (Current Period Net Profit Margin - Previous Period Net Profit Margin) / Previous Period Net Profit Margin

**Earnings Before Interest and Taxes (EBIT)**** Growth Rate **= (Current Period EBIT - Previous Period EBIT) / Previous Period EBIT

**Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)**** Growth Rate **= (Current Period EBITDA - Previous Period EBITDA) / Previous Period EBITDA

**Operating Income Growth Rate **= (Current Period Operating Income - Previous Period Operating Income) / Previous Period Operating Income

**Earnings Per Share (EPS) Growth Rate **= (Current Period EPS - Previous Period EPS) / Previous Period EPS

**Dividend Growth Rate **= (Current Period Dividend - Previous Period Dividend) / Previous Period Dividend

**Free Cash Flow**** Growth Rate **= (Current Period Free Cash Flow - Previous Period Free Cash Flow) / Previous Period Free Cash Flow

**Retained Earnings Growth Rate **= (Current Period Retained Earnings - Previous Period Retained Earnings) / Previous Period Retained Earnings

**Asset Growth Rate **= (Total Assets at End of Period - Total Assets at Start of Period) / Total Assets at Start of Period

**Equity Growth Rate **= (Total Equity at End of Period - Total Equity at Start of Period) / Total Equity at Start of Period

## Profitability Metrics

**Gross Profit**** Margin** = Gross Profit / Revenue * 100

**Operating Profit Margin** = Operating Profit / Revenue * 100

**Net Profit Margin** = Net Profit / Revenue * 100

**Return on Assets (ROA)** = Net Income / Average Total Assets

**Return on Equity (ROE)** = Net Income / Average Shareholder's Equity

**Return on Investment (ROI)** = (Gain from Investment - Cost of Investment) / Cost of Investment

**Earnings Before Interest and Taxes (EBIT)**** Margin** = EBIT / Revenue

**Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)**** Margin** = EBITDA / Revenue

**Operating Ratio** = Operating Expenses / Revenue

**Contribution Margin** = (Sales - Variable Costs) / Sales

**Price Earnings Ratio (P/E Ratio)** = Market Price per Share / Earnings per Share

**Earnings per Share (EPS)** = (Net Income - Dividends on Preferred Stock) / Average Outstanding Shares

**Cash Return on Assets (Cash ROA)** = Cash Flow from Operations / Total Assets

**Cash Return on Capital Invested (CROCI)** = (Cash Flow from Operations - Depreciation) / (Total Assets - Current Liabilities)

**Return on Sales (ROS)** = Net Income / Sales

**Return on Capital Employed (ROCE)** = EBIT / (Total Assets - Current Liabilities)

**Return on Invested Capital (ROIC)** = (Net Income - Dividends) / (Debt + Equity)

**Return on Research Capital (RORC)** = (Gross Profit - R&D Expense) / R&D Expense

**Asset Turnover Ratio** = Sales / Average Total Assets

**Equity Multiplier** = Total Assets / Total Equity

## Liquidity Metrics

**Current Ratio**** **= Current Assets / Current Liabilities

**Quick Ratio (or Acid-Test Ratio)**** **= (Current Assets - Inventory) / Current Liabilities

**Cash Ratio**** **= Cash and Cash Equivalents / Current Liabilities

**Operating Cash Flow Ratio**** **= Operating Cash Flow / Current Liabilities

**Net Working Capital**** **= Current Assets - Current Liabilities

**Days Sales Outstanding (DSO)**** **= (Accounts Receivable / Total Credit Sales) x Number of Days

**Days Payable Outstanding (DPO)**** **= (Accounts Payable / Cost of Goods Sold) x Number of Days

**Days Inventory Outstanding (DIO)**** **= (Average Inventory / Cost of Goods Sold) x Number of Days

**Cash Conversion Cycle (CCC)**** **= DSO + DIO - DPO

## Solvency Metrics

**Debt to Equity Ratio** = Total Liabilities / Shareholder's Equity

**Debt Ratio** = Total Liabilities / Total Assets

**Equity Ratio** = Shareholder's Equity / Total Assets

**Times Interest Earned Ratio (Interest Coverage Ratio)** = Earnings Before Interest and Taxes (EBIT) / Interest Expense

**Fixed Charge Coverage Ratio** = (EBIT + Lease Payments) / (Interest Expense + Lease Payments)

**Cash Flow to Debt Ratio** = Operating Cash Flow / Total Debt

## Efficiency Metrics

**Inventory Turnover** = Cost of Goods Sold / Average Inventory

**Receivables Turnover** = Net Credit Sales / Average Accounts Receivable

**Payables Turnover** = Cost of Goods Sold / Average Accounts Payable

**Asset Turnover** = Net Sales / Average Total Assets

**Fixed Asset Turnover** = Net Sales / Average Net Fixed Assets

**Working Capital Turnover** = Net Sales / Average Working Capital

**Equity Turnover** = Net Sales / Average Shareholders' Equity

**Days Sales Outstanding (DSO)** = (Average Accounts Receivable / Net Credit Sales) x Number of Days in Period

**Days Inventory Outstanding (DIO****)** = (Average Inventory / Cost of Goods Sold) x Number of Days in Period

**Days Payable Outstanding (DPO)** = (Average Accounts Payable / Cost of Goods Sold) x Number of Days in Period

**Cash Conversion Cycle (CCC)** = DIO + DSO - DPO

## Cost Metrics

**Cost of Goods Sold (COGS)** = Beginning Inventory + Purchases + Additional Costs - Ending Inventory

**Total Cost **= Fixed Costs + Variable Costs

**Variable Cost **= Variable Cost per Unit x Number of Units Produced

**Fixed Cost**: No specific formula as fixed costs remain constant regardless of the production volume.

**Average Cost (or Average Total Cost) **= Total Cost / Number of Units Produced

**Marginal Cost **= Change in Total Cost / Change in Quantity Produced

**Direct Costs: **These are costs that can be directly attributed to a product or service. Examples include raw materials and labor costs for production. The calculation would depend on the specific costs being considered.

**Indirect Costs (or Overhead Costs)** These are costs that are not directly tied to a specific product or service but are necessary for the business. Examples include rent, utilities, and salaries of non-production employees. The calculation would depend on the specific costs being considered.

**Operating Costs (or Operating Expenses) **= COGS + Operating Expenses (like rent, salaries, utilities, etc.)

**Sunk Cost: **A cost that has already been incurred and cannot be recovered. It's not calculated but rather recognized as a past expense.

**Opportunity Cost: **The value of the next best alternative that is forgone when a decision is made. It's a conceptual metric and doesn't have a standard formula, as it depends on the specific alternatives being considered.

**Break-even Point (in units)** = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)

**Break-even Point (in sales) **= Break-even Point (in units) x Selling Price per Unit

## Valuation Metrics

**Price-to-Earnings (P/E) Ratio** = Market Price per Share / Earnings per Share (EPS)

**Price-to-Sales (P/S) Ratio** = Market Capitalization / Total Sales (or Revenue)

**Price-to-Book (P/B) Ratio** = Market Price per Share / Book Value per Share

**Dividend Yield** = Annual Dividends per Share / Market Price per Share

**Enterprise Value (EV)** = Market Capitalization + Total Debt - Cash and Cash Equivalents

**EV/EBITDA (Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization)** = Enterprise Value / EBITDA

**EV/Sales (Enterprise Value to Sales)** = Enterprise Value / Total Sales (or Revenue)

**EV/EBIT (Enterprise Value to Earnings Before Interest and Taxes)** = Enterprise Value / EBIT

**Price-to-Earnings Growth (PEG) Ratio** = P/E Ratio / Annual EPS Growth Rate

**Price-to-Free Cash Flow** = Market Capitalization / Free Cash Flow

**Price-to-Operating Cash Flow** = Market Capitalization / Operating Cash Flow

**Market Value to Replacement Cost (Tobin's Q)** = (Market Value of Debt + Market Value of Equity) / (Replacement Cost of Total Assets)

## Cash Flow Metrics

**Operating Cash Flow (OCF)** = Net Income + Non-Cash Expenses (like Depreciation and Amortization) - Changes in Working Capital

**Free Cash Flow (FCF)** = Operating Cash Flow - Capital Expenditures

**Free Cash Flow to Equity (FCFE)** = Net Income - Net Capital Expenditure - Change in Net Working Capital + New Debt - Debt Repayment

**Free Cash Flow to the Firm (FCFF)** = EBIT x (1 - Tax Rate) + Depreciation & Amortization - Changes in Working Capital - Capital Expenditures

**Cash Flow from Investing Activities: **This is typically derived from the cash flow statement and includes cash inflows and outflows from investments like purchase or sale of long-term assets and other investments.

**Cash Flow from Financing Activities: **This is also derived from the cash flow statement and includes cash inflows and outflows from financing activities like issuing or buying back stock, borrowing, or repaying debt.

**Net Change in Cash** = (Cash Flow from Operating Activities) + (Cash Flow from Investing Activities) + (Cash Flow from Financing Activities)

**Cash Flow Margin** = Operating Cash Flow / Net Sales

**Cash Flow Return on Investment (CFROI)** = Cash Flow from Operations / (Total Assets - Current Liabilities)

**Cash Flow per Share** = Operating Cash Flow / Number of Shares Outstanding

## Coverage Metrics

**Interest Coverage Ratio**** **= Earnings Before Interest and Taxes (EBIT) / Interest Expense

**Debt Service Coverage Ratio (DSCR)**** **= Net Operating Income / Total Debt Service

**Fixed Charge Coverage Ratio **= (EBIT + Lease Payments) / (Interest Expense + Lease Payments)

**Cash Coverage Ratio **= (EBIT + Depreciation) / Interest Expense

**Asset Coverage Ratio **= (Total Assets - Intangible Assets) / Total Debt

**Times Interest Earned Ratio **= EBIT / Interest Expense

**Cash Flow to Debt Ratio **= Operating Cash Flow / Total Debt

## Employee Metrics

**Employee Turnover Rate **= (Number of employees who left during the period / Average number of employees during the period) x 100

**Cost Per Hire** = Total recruitment costs / Number of hires in a given period

**Average Training Cost Per Employee **= Total training costs / Number of employees trained

**Revenue Per Employee **= Total revenue / Average number of employees during the period

**Profit Per Employee **= Net profit / Average number of employees during the period

**Overtime Expense **= Number of overtime hours x Overtime hourly rate

**Employee Productivity **= Output or revenue produced / Number of employees

**Compensation Ratio **= Total compensation (salaries, benefits, bonuses) / Total revenue

**Benefits Cost Per Employee **= Total cost of employee benefits / Average number of employees during the period

**Absenteeism Rate **= (Number of days absent / (Number of employees x Number of workdays)) x 100

**Utilization Rate** (common in consulting or service industries)** **= (Billable hours / Total working hours) x 100

**Employee Satisfaction Index **= (Number of satisfied responses / Total number of responses) x 100

**Employee Engagement Rate **= (Number of engaged responses / Total number of responses) x 100

## Customer Metrics

**Customer Acquisition Cost (CAC)** = Total cost spent on acquiring new customers / Number of customers acquired

**Customer Lifetime Value (CLTV or LTV)** = (Average purchase value x Average purchase frequency) x Average customer lifespan

**Customer Retention Rate** = (Number of customers at the end of the period - Number of new customers during the period) / Number of customers at the start of the period x 100%

**Churn Rate (or Attrition Rate)** = (Number of customers lost during the period / Number of customers at the start of the period) x 100%

**Net Promoter Score (NPS)** = % of Promoters - % of Detractors Note: Promoters are customers who rate the business 9 or 10 out of 10, and Detractors are those who rate it 0 to 6.

**Average Revenue Per User (ARPU)** = Total revenue / Number of users

**Customer Profitability Score** = Customer Profitability Score = Net profit from a customer / Total revenue from that customer x 100%

**Customer Concentration** = Customer Concentration = Revenue from a specific customer / Total revenue x 100%

**Customer Equity** = Sum of CLTV of all customers

**Customer Payback Period** = CAC / (Gross margin per customer x Monthly transactions per customer)

**Customer Referral Rate** = Number of new customers acquired through referrals / Total number of new customers x 100%

**Customer Satisfaction Score (CSAT)** = (Number of satisfied customers / Total number of survey respondents) x 100%

## Project Metrics

**Net Present Value (NPV)** = Sum of (Cash inflow for period t / (1 + r)^t) - Initial Investment Where:

t = time period (e.g., year 1, year 2, etc.)

r = discount rate

**Internal Rate of Return (IRR): **The IRR is the discount rate (r) at which NPV = 0. It's typically solved using iterative methods or software, as it's not a straightforward formula.

**Payback Period** = Time taken for the cumulative cash inflows to equal the initial investment

**Discounted Payback Period** = Time taken for the cumulative discounted cash inflows to equal the initial investment

**Profitability Index (PI)** = Present Value of Future Cash Flows / Initial Investment

**Return on Investment (ROI)** = (Net Profit from the Project / Cost of the Project) x 100%

**Benefit-Cost Ratio (BCR)** = Total Expected Benefits / Total Expected Costs

**Earnings Before Interest and Taxes (EBIT)** = Revenue - Operating Expenses (excluding interest and taxes)

**Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)** = Revenue - Operating Expenses (excluding interest, taxes, depreciation, and amortization)

**Break-Even Point** = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)

**Sensitivity Analysis**: This isn't a formula per se, but a method. It involves changing one variable at a time (e.g., discount rate, project costs, expected revenues) to see how sensitive the project's NPV or other metrics are to changes in that variable.

**Scenario Analysis**: Like sensitivity analysis, scenario analysis doesn't have a specific formula. It involves evaluating a project under different scenarios (e.g., best case, worst case, most likely case) to understand potential outcomes and risks.

## Supply Chain Metrics

**Inventory Turnover** = Cost of Goods Sold / Average Inventory

**Days Inventory Outstanding (DIO)** = (Average Inventory / Cost of Goods Sold) x 365

**Days Sales Outstanding (DSO)** = (Accounts Receivable / Total Revenue) x 365

**Days Payable Outstanding (DPO)** = (Accounts Payable / Cost of Goods Sold) x 365

**Cash Conversion Cycle (CCC)** = DIO + DSO - DPO

**Fill Rate** = (Number of Orders Fulfilled / Total Number of Orders) x 100

**Stockout Rate** = (Number of Stockouts / Total Number of Orders) x 100

**Order Lead Time** = Date Goods Received - Date Order Placed

**Inventory Carrying Cost** = (Average Inventory Value x Carrying Cost Percentage) / Time Period

**Return on Assets (ROA) for Supply Chain** = Net Income / Average Total Assets

**Supply Chain Operating Cost as a Percentage of Sales** = (Total Supply Chain Costs / Total Sales) x 100

**Perfect Order Rate** = (Number of Perfect Orders / Total Number of Orders) x 100

**Freight Cost as a Percentage of Sales** = (Total Freight Costs / Total Sales) x 100

**Average Inventory Level** = (Beginning Inventory + Ending Inventory) / 2

**Order Accuracy Rate** = (Number of Accurate Orders / Total Number of Orders) x 100

## Risk and Return Metrics

**Expected Return** Calculation: Sum of (Probability of each return * Corresponding return)

**Variance **= Sum of [Probability of each return * (Return - Expected Return)^2]

**Standard Deviation (Volatility) **= Square root of Variance

**Beta (β) **= Covariance(Return of the asset, Return of the market) / Variance(Return of the market)

**Alpha (α) **= Actual Return - [Risk-free rate + Beta * (Market Return - Risk-free rate)]

**Sharpe Ratio **= (Expected Return of the asset - Risk-free rate) / Standard Deviation of the asset's return

**Sortino Ratio **= (Expected Return of the asset - Risk-free rate) / Standard Deviation of the negative asset return

**Treynor Ratio **= (Expected Return of the asset - Risk-free rate) / Beta

**R-squared (R^2) **= Square of the correlation between the asset's returns and the market's returns

**Information Ratio **= (Return of the portfolio - Return of the benchmark) / Tracking Error

**Tracking Error **= Standard Deviation of (Portfolio returns - Benchmark returns)

**Maximum Drawdown **= Maximum peak-to-trough decline in the value of a portfolio or asset

**Value at Risk (VaR) **= Maximum potential loss at a given confidence level over a specific time horizon

**Conditional Value at Risk (CVaR) or Expected Shortfall **= Expected loss given that the loss is beyond the VaR level

## Market Share Metrics

**Market Share by Units **= (Number of Units Sold by the Company / Total Units Sold in the Market) x 100%

**Market Share by Revenue **= (Company's Sales Revenue / Total Sales Revenue in the Market) x 100%

**Relative Market Share **= Company's Market Share / Largest Competitor's Market Share

**Market Concentration **= Sum of the Market Shares of the Top N Companies (often used for the top 3, 4, or 5 companies)

**Market Share Growth **= ((Market Share in Current Period - Market Share in Previous Period) / Market Share in Previous Period) x 100%

**Gain or Loss in Market Share **= Market Share in Current Period - Market Share in Previous Period

**Share of Wallet **= (Company's Sales to a Specific Customer / Total Expenditure by that Customer) x 100%

**Share of Segment **= (Company's Sales in a Specific Segment / Total Sales in that Segment) x 100%

# Varaa esittely

# Varaa esittely

## Ali Omar, COO

• Caleido.io:n toinen perustaja

• Syntynyt Suomessa, kotoisin Kainuusta, Hyrynsalmelta

• Esittely suomen kielellä

• Lääketieteen lisensiaatti, Oulun yliopisto

• MBA, Aalto EE, Helsinki

• 15+ vuotta kasvuyrittäjänä

• Perusti vuonna 2007 Med Group-konsernin yhdessä Kustaa Pihan kanssa

(nyk. sosiaali- ja terveydenhuoltoalan palveluyritys ONNI, onnion.fi)

• Med Groupin liikevaihto 0 → 100 M€ run-rate 9½ vuodessa

• Vaikuttaja ja sijoittaja suomalaisessa teknologiayrityskentässä

• Osakkaana kokemusta yli 30 suomalaisesta startupista

•The Finnish Business Angel 2019, FiBAN

• LinkedIn