Dictionary of Financial Ratios

Accounts Payable :
(Comptes fournisseurs)

Includes, but is not limited to, Trade Accounts Payable and Trade Acceptances, that is, amounts owed to vendors for goods and services purchased from outside suppliers and due within the normal operating cycle of a company.

Accounts Payable/Inventory :
(Comptes fournisseurs/stocks)

This measure shows the proportion of total Inventories that are effectively being financed by a company's vendors, through an open Accounts Payable balance.

                              Accounts Payable
Accounts Payable/Inventory = ------------------ 
                                 Inventory

Accounts Receivable :
(Comptes clients)

The balance due from a customer for goods or services sold on open account. Includes, but is not limited to, Net Trade Accounts Receivable and Net Accounts and Notes Receivable.

Accrued Expenses :
(Charges, charges à payer, frais généraux - comptabilité commerciale)

Results from the use of accrual accounting procedures, wherein expenses are recognized when incurred rather than when paid, as in a cash accounting system. Includes, but is not limited to, Taxes (other than Income Taxes), Interest, Rent, Pension and Other Employee Benefits, Payrolls, Wages and Salaries, and Accrued Liabilities.

Annual Growth Rate :
(Taux de croissance annuelle, taux de variation annuelle)

Plotted over a period of time, this measure defines the underlying business cycle of a given company or industry, revealing peaks, troughs, periods, and amplitudes for forecasting.

                 Sum of Most Recent 4 Qtrs.' Revs.
Annual Growth = ----------------------------------- - 1 X 100 (%)
                  Sum of Year-Ago 4 Qtrs.' Revs.

Assets-Total :
(Total de l'actif, total de bilan)

The level of a firm's assets at a particular time. This total must equal the liabilities plus equity section of a balance sheet. Total Assets includes Total Current Assets, Net Property, Plant and Equipment + Investments and Advances to Subsidiaries + Other Non-Current Assets + Deferred Charges + Intangibles + Deposits and Other Assets.

Asset Turns :
(Rotation des actifs, taux de rotation des actifs)

This asset management ratio measures the turnover of all the firm's assets.

                     Quarterly Revenue X 4
Total Asset Turns = ----------------------- Times/Year
                         Total Asset

Average Daily Volume :
(Volume moyen quotidien)

In the event of stock splits, Average Shares, trading prices, and trading volumes are adjusted in proportion to the split ratio to ensure consistency in comparing market values and share-oriented data.

                        Total Number of Shares Traded in a Month
Average Daily Volume = ------------------------------------------
                                22 (trading days/month)

Basic Earning Power (1) :
(Capacité bénéficiaire)

This ratio shows the raw earning power of the firm's assets, before the influence of taxes and leverage.

                       Qtr. Earnings Before Interest & Taxes X 4
Basic Earning Power = ------------------------------------------- %
                                     Total Assets

Book Value Per Share :
(Valeur nette comptable par action, actif net par action)

Represents the accounting value of a share of common stock. Preferred stock equity should be stated at liquidation price if other than book, because the preferred shareholders would be paid that value in the event of liquidation.

                        Shareholders' Equity
Book Value per Share = ---------------------- $/Share
                           Average Shares

Capital Expenditures :
(Investissements, investissements industriels)

Capital Expenditures represent the funds used to acquire fixed assets other than those associated with acquisitions.

Capital Expenditures to Revenue :
(Ratio des investissements au chiffre d'affaires)

This ratio shows a firm's Capital Expenditures as a function of its Net Sales.

                                    Capital Expenditures
Capital Expenditures/Revenue = -------------------------------
                                Current Quarter Net Sales X 4

Cash Conversion Days (2) :
(Jours de conversion en trésorerie)

Represents the length of time between actual cash expenditures to pay for productive resources and the cash receipts from the sale of products.

                 Inventory
CCC = ------------------------------- + Receivable Days - Payable Days
          Quarterly Net Sales X 4
         -------------------------
                    365

Cash & Equivalents :
(Disponibilités)

Cash includes, but is not limited to, Cash, Bank Drafts, Demand Deposits, Demand Certificates of Deposit, Letters of Credit, Non-Interest Bearing Deposits, Restricted Cash, Escrow Deposits.

Marketable Securities includes, but is not limited to, Commercial Paper, Certificates of Deposit, Time Certificates of Deposit, Time Deposits, Interest Bearing Deposits, Government Securities, Short Term Investments, Temporary Cash Investments.

Cash Flow :
(Cash flow, autofinancement)

Equals Net Income + Depreciation and other noncash charges for a particular period, that is, monthly, quarterly, or annually. This is an abbreviated and approximate estimate of cash flow derived from the income statement, not from the cash flow statement.

Cash Flow = Quarterly Net Income + Depreciation. 

Cash Flow/Current Liabilities :
(Cash flow/passif circulant)

Indicates the degree to which a company can pay its immediate obligations through operational cash flow of the company.

                                 Quarterly Cash Flow X 4
Cash Flow/Current Liabilities = -------------------------          
                                   Current Liabilities

Cash Flow/Total Liabilities :
(Cash flow/passif total)

Indicates the degree to which a company can pay its immediate and long term obligations through operational cash flow of the company.

                               Quarterly Cash Flow X 4
Cash Flow/Total Liabilities = ------------------------- 
                                  Total Liabilities

Cash Per Share :
(Disponibilités et valeurs mobilières/actions en circulation)

Indicates the level of cash within the firm as a function of the average number of shares outstanding.

                  Cash & Marketable Securities
Cash per Share = ------------------------------ $/Share
                         Average Shares

Cash Ratio :
(Ratio de trésorerie)

Sometimes called the Liquidity Ratio, this measure shows how quickly a company could liquidate its most immediate liabilities.

              Cash & Marketable Securities
Cash Ratio = ------------------------------ 
                  Current Liabilities

Current Assets :
(Actif circulant)

Those assets that can be converted to cash within 12 months. Current Assets includes Cash + Marketable Securities + Receivables + Inventories + Notes Receivable + Other Current Assets & Prepaid Expenses.

Current Liabilities :
(Passif circulant, passif de court terme, dettes exigibles à moins d'un an)

Those liabilities that must be paid within one year. Includes Short-Term Notes payable, Accounts Payable, Current Maturities of Long-Term Debt, current portion of Capital Leases, Accrued Expenses, Income Taxes, and Other Current Liabilities.

Current Ratio :
(Ratio de liquidité)

This ratio gives a view of company liquidity and is an indicator of the Short-Term Debt-paying ability of the firm.

                   Current Assets
Current Ratio = ---------------------
                 Current Liabilities

Debt-Total :
(Total du passif)

The sum of Short Term Debt and Long Term Debt.

Depreciation :
(Amortissements)

Depreciation represents the process of allocating the cost of a depreciable asset to the accounting periods covered during its expected useful life to a business. It is a non-cash charge for use and obsolescence of an asset.

Earnings Growth :
(Croissance des résultats, croissance du résultat net, croissance t/t du résultat net)

Net Income growth in % versus the prior quarterly period.

                   Current Qtr. Net Income - Prior Qtr. Net Income
Earnings Growth = ------------------------------------------------- %
                                Prior Qtr. Net Income

Earnings Per Share :
(Bénéfice par action, BPA, bénéfice net par action)

Earnings divided by the number of Average Shares. The value used in calculations is as-reported by the company and is not a calculated value.

Economic Value Added :
(Valeur ajoutée économique)

Economic Value Added (EVA) is the difference between a company's economic profit and its economic cost, expressed in $'s. As such, a company with positive EVA is said to be 'creating value; likewise, a company with negative EVA is said to be 'destroying value'. In addition, EVA offers a unified approach to measuring performance, capital budgeting and, incentive compensation.

EVA = ROIC (Return on Invested Capital) - WACC (Weighted Average Cost of Capital) 

EPS Growth :
(Croissance du BPA)

EPS growth in % versus the prior quarterly period.

                            Current Qtr. EPS - Prior Qtr. EPS
EPS Growth = ----------------------------------- %
                       Prior Qtr. EPS

Equity :
(Capitaux propres, fonds propres)

Represents the shareholders' ownership interest in the company. Includes Preferred stock, Net Common Stock, Capital Surplus, and Retained Earnings minus Treasury Stock and Other Liabilities.

Equity Per Share :
(Capitaux propres/nombre moyen d'actions)

This value can be related to Share Price to determine whether the stock of a company is fairly valued based on balance sheet strength.

                    Shareholders' Equity
Equity per Share = ---------------------- $/Share
                       Average Shares

Gross Margin :
(Marge brute)

Gross margin is that ratio relating Gross Profit to Net Sales.

                                Gross Profit
Gross Margin = -------------- %
                 Net Sales

Gross Profit :
(Valeur ajoutée)

Equals the difference between a company's Net Sales and the Cost of Goods Sold.

Gross Profit = Net Sales - Cost of Goods Sold. 

Growth vs Prior Qtr. :
(Progression trimestrielle séquentielle du CA)

Revenue growth in % versus the prior quarterly period.

                        Current Qtr. Revenue - Prior Qtr. Revenue 
Growth vs Prior Qtr. = ------------------------------------------- %
                                   Prior Qtr. Revenue

Growth vs Year-ago Qtr. :
(Progression t/t du CA)

Revenue growth in % versus the same quarterly period one year ago. This measure tends to factor out seasonal variations because the measurements are taken at the same time in the year for both quarters.

                           Current Qtr. Revenue - Year-ago Qtr. Revenue 
Growth vs Year-ago Qtr. = ---------------------------------------------- %
                                      Year-ago Qtr. Revenue

Interest Margin :
(Frais financiers/CA, banque: marge nette d'intérêt)

The relationship of Interest Expense as a function of Net Sales.

                   Interest Expense
Interest Margin = ------------------ %
                      Net Sales

Inventory :
(Stocks)

The balance of goods on hand. The total of Raw Materials + Work in Progress + Finished Goods.

Inventory to Revenue :
(Nombre de jours de stocks, stocks/CA)

This ratio shows the Inventory level relative to Sales.

                          Inventory
Inventory/Revenue = ---------------------
                     Net Quarterly Sales

Inventory Turns :
(Rotation des stocks)
This measure shows how many times the Inventory of a firm is sold and replaced during the period.

                    Quarterly Cost of Goods Sold X 4
 Inventory Turns = ---------------------------------- Times/Year
                          Quarterly Inventory

Liabilities & Equity :
(Total du bilan)

Liabilities And Equity must equal Total Assets. Liabilities represent claims on the assets of a company. Total Liabilities include Current Liabilities, Mortgages, Deferred Charges, Convertible Debt, Long Term Debt, Non-Current Capital Leases, and Other Long Term Liabilities. Equity includes Preferred Stock, Net Common Stock, Capital Surplus, Retained Earnings less Treasury Stock and Other Liabilities.

Liabilities, Non-Debt :
(Passif hors dette)

Total Liabilities minus interest-bearing liabilities, including all debt. Liabilities represent claims on the assets of a company. Total Liabilities include Current Liabilities, Mortgages, Deferred Charges, Convertible Debt, Long Term Debt, Non-Current Capital Leases, and Other Long Term Liabilities. Equity includes Preferred Stock, Net Common Stock, Capital Surplus, Retained Earnings less Treasury Stock and Other Liabilities.

Long Term Debt :
(Dette de long terme, dette exigible à plus d'un an, passif de long terme)

Represents any liability due in a year or more and includes Mortgages, Convertible Debt, Long Term Debt, and Non-Current Capital Leases.

Long Term Debt Per Share :
(Dette de long terme par action)
This measure shows the degree of financial leverage under which a company operates relative to the Average Number of Shares Outstanding.

                            Long Term Debt
Long Term Debt per Share = ---------------- $/Share
                            Average Shares

Market Value :
(Valeur de marché, capitalisation boursière)

Market Value is the common share price of a company's stock, at any given time, times the average shares ourstanding.

Market Value = Closing Stock Price X Average Shares. 

Market Value to Revenue :
(Capitalisation boursière/CA)

This ratio shows a firm's Market Value as a function of its Net Sales.

                                Market Value
Market Value/Revenue = -------------------------------
                        Current Quarter Net Sales X 4

Net Cash Per Share :
(Trésorerie nette par action)
This measure indicates the Net Cash position of the company after Debt is subtracted.

                       Cash & Marketable Securities - Total Debt
 Net Cash per Share = ------------------------------------------- $/Share
                                    Average Shares

Net Income :
(Résultat net)

In general, the sum remaining after all expenses have been paid or deducted.

Net Income = Net Income Before Extraordinary Items +/-
              Extraordinary Items and Discontinued Operations.

Note: Net Income Before Extraordinary Items =
       Pretax Income - Provision for Income Taxes -
       Minority Interest Income +/-
       Investment Gains/Losses +/-
       Other Income.

Net Margin :
(Marge nette)

This ratio tracks how the company has integrated sales efforts, prices, and costs.

              Net Income Before Extraordinary Items
Net Margin = --------------------------------------- %
                            Net Sales

Non-Operating Income :
(Résultat financier)

Includes, but is not limited to, net proceeds from dividend income, investment profits, miscellaneous other non-operating income, investment losses, foreign exchange losses, write-down of assets, and other non-operating expenses.

Operating Income :
(Résultat d'exploitation, résultat opérationnel)

Also referred to as Income Before Depreciation and Amortization, Operating Income equals gross profit less Research and Development (R&D) expenditures and Selling, General and Administrative expenses (SG&A). Representing the income due to continuing operations, it excludes one-time events like restructuring charges or sales of assets.

Operating Income = Gross Profit - R&D Expenditures - SG&A Expenses. 

Operating Margin :
(Marge d'exploitation marge opérationnelle)

This ratio reflects Operating Income as a function of Net Sales.

                    Operating Income
Operating Margin = ------------------ %
                       Net Sales

Payable Days :
(Crédit fournisseurs)

This ratio shows the average number of days that elapse between the purchase of material and labor and payment for them.

                   Quarterly Payables X 90
 Payable Days = ------------------------------ Days (Deferral Period)
                 Quarterly Cost of Goods Sold

Payable Turns :
(Rotation des comptes clients)

This measure shows how many times the Accounts Payable of a firm are paid during a one year period.

                                  Quarterly Cost of Goods Sold X 4
Payable Turns = ---------------------------------- Times/Year
                         Accounts Payable

PP&E (Net) :
(Immobilisations nettes, immobilisations non amorties, part non amortie des immobilisations)

These tangible assets are the physical facilities used in the operation of the firm. PP&E includes, but is not limited to, Property, Plant & Equipment, Property Under Leases, Property Under Capital Leases, and Leasehold Improvements. Accumulated Depreciation includes, but is not limited to, Depreciation, Deletion, and Amortization.

Net PP&E = Property, Plant & Equipment - Accumulated Depreciation. 

PP&E/Revenue :
(Immobilisations nettes/CA)

Net Property, Plant, and Equipment minus Depreciation and Amortization. This ratio represents the level of capital resources required by the company to support a given level of sales.

                                Net PP&E
PP&E/Revenue = -----------
                Net Sales

Pretax Income :
(Résultat avant impôt sur les sociétés)

Net income before Federal and State Income Taxes.

Pretax Income = Income Before Depreciation & Amortization -
                 Depreciation and Amortization +/-
                 Non-Operating Income/Expense -
                 Interest Expense. 

Pretax Margin :
(Marge avant impôt sur les sociétés)

Reflects the overall efficiency of the firm's level of Income as a function of Net Sales.

                                  Pretax Income
Pretax Margin = --------------- %
                  Net Sales

Price/Earnings :
(PER, multiple de capitalisation, P/E)

This ratio, commonly referred to as P/E, shows the relationship between Market Price of a share of Common Stock and that stock's current Earnings Per Share. In graphs the price/earnings ratio is only graphed for values between 0 and 100.

                                 Stock Price per Share
Price/Earnings Ratio = -----------------------------------------
                        Sum of Last 4 Qtrs.' Earnings per Share

Price to Book :
(Ratio P/VNC, Prix/Valeur nette comptable, Cours/Valeur nette comptable)

This ratio compares a stock's Market Price to its Book Value.

                       Stock Price per Share
Price to Book Ratio = -----------------------
                       Book Value per Share

Quick Ratio :
(Ratio de disponibilités)

Also called acid-test ratio or quick asset ratio, by excluding inventory, this key liquidity ratio focuses on the company's more liquid assets.

               Cash & Marketable Securities + Receivables
Quick Ratio = --------------------------------------------
                       Total Current Liabilities

Receivable Days :
(Crédit clients, Jours de crédit clients)
This number reflects the average length of time between credit sales and payments received.

                  Quarterly Receivables X 90
Receivable Days = --------------------------- Days (Days Sales Outstanding, or DSO)
                      Quarterly Net Sales

R&D Expense :
(Frais de R&D)

Expenses involved with developing new technologies and bringing new products or services to market.

R&D Margin :
(Frais de R&D/CA)

R&D margin is that ratio relating R&D Expense to Net Sales.

              R&D Expense
R&D Margin = ------------- %
               Net Sales

Return on Assets :
(Rendement des actifs, RoA)

Return On Assets (ROA) measures the firm's ability to use its assets to create profits.

                    Qtr. Net Income X 4
Return on Assets = --------------------- %
                       Total Assets

Return on Capital :
(Rendement du capital, RoC)

Measures the amount earned on the capital being used in the company.

                                           Qtr. Net Income X 4
Return on Total Capital = ------------------------------------------------------ %
                           Total Assets - Current Liabilities + Short Term Debt

Return on Equity :
(Rendement des capitaux propres, retour sur fonds propres, RoE)

Measures how much profit is being returned on the common shareholders' equity.

                    Qtr. Net Income X 4
Return on Equity = ---------------------- %
                    Shareholders' Equity

Revenues :
(Chiffre d'affaires, CA, CA hors taxes)

Refers to the level of Net Sales of a company for a specified period of time.

ROIC :
(Rendement des capitaux permanents, ROCI)

Amount, expressed as a percentage, earned on a company's total capital--its common and preferred stock equity plus its long-term funded debt. Return on Invested Capital, usually termed return on investment, or ROI, is a useful means of comparing companies, or corporate divisions, in terms of efficiency of management and viability of product lines.

        Quarterly Operating Profit X 4
ROIC = -------------------------------- %
           Average Invested Capital

SG&A Expense :
(Frais généraux - frais commerciaux, généraux et administratifs)

Selling, general and administrative expense accounts for the overhead structure necessary to support sales and executive management functions for the company. Includes, but is not limited to, Advertising and Promotion, Bad Debt Expenses, Maintenance, Selling, General and Administrative Expenses, Other Operating Expenses, Taxes other than Income Taxes.

SG&A Margin :
(Frais généraux/CA)

SG&A Margin is that ratio relating SG&A Expense to Net Sales.

               SG&A Expense
SG&A Margin = -------------- %
                Net Sales

Shares - Used to Compute EPS :
(Calcul du BPA)

Reported on the Income Statement as the number of shares used for calculating EPS. This is at the highest level of dilution reported by the company in financial releases. This outstanding shares amount represents common equity shares in trade. In the event of stock splits, Shares, trading prices, and trading volumes are adjusted in proportion to the split ratio to ensure consistency in comparing market values and share-oriented data.

Short Term Debt :
(Passif exigible à moins d'un an, passif circulant, passif de court terme)

All liabilities coming due within the next 12 months. It includes Notes Payable, Current Long Term Debt, and Current Portion of Capital Leases.

Short Term Debt Per Share :
(Passif circulant par action)

Reflects the level of short-term debt relative to the level of the Average Number of Shares Outstanding.

                             Short Term Debt
Short Term Debt per Share = ----------------- $/Share
                             Average Shares

Stock Price 6 Mo. Avg. :
(Moyenne mobile sur 6 mois du cours de bourse)

A moving 6-month average of monthly closing stock prices.

Stock Price Quarterly :
(Cours de clôture trimestriel)

The closing Stock price of a firm at quarter end. Stock prices are adjusted if there was a stock dividend or stock split during a given month. Quarterly stock prices are as of the end of each quarter.

Tangible Equity Per Share :
(Immobilisations non financières par action)

This measure subtracts out the sum of balance sheet intangibles such as goodwill, patents, trademarks, copyrights, property rights, and operating franchises.

                         Shareholders' Equity - Intangibles
Tangible Equity/Share = ------------------------------------ $/Share
                                   Average Shares

Tax Rate :
(Taux d'imposition, taux d'IS)

The rate of tax imposed by the federal and state governments on a firm's level of net earnings. Effective tax rates can be heavily distorted or rendered meaningless when Net Income approaches zero.

            Provision for Income Tax
Tax Rate = -------------------------- %
                 Pretax Income

Total Debt Per Share :
(Dette financière par action, passif par action)

This ratio reflects the degree of financial leverage present within a firm relative to the average shares outstanding.

                          Total Debt
Total Debt per Share = ---------------- $/Share
                        Average Shares

Total Debt to Capital :
(Dette financière/Total du passif + capitaux propres)

This ratio is a reflection of the degree of total debt present relative to total liabilities plus equity.

                                 Total Debt
Total Debt/Capital = -----------------------------------
                      Total Debt + Shareholders' Equity

Total Debt to Equity :
(Total du passif/capitaux propres, passif/capitaux propres)

This ratio represents the degree of financial leveraging under which a company must operate.

                          Total Debt
Total Debt/Equity = ----------------------
                     Shareholders' Equity

Total Liabilities/Equity :
(Passif/Capitaux propres)

This solvency ratio represents the proportion of Shareholders Equity that is under obligation. The lower this ratio, the better.

                             Total Liabilities
Total Liabilities/Equity = ---------------------
                            Shareholders Equity

Total Liabilities/Total Assets :
(Passif/Actif)

This solvency ratio represents the relationship between a company's obligations and its offsetting assets. The lower this ratio, the better.

                                  Total Liabilities
Total Liabilities/Total Assets = -------------------
                                    Total Assets

Weighted Average Cost of Capital (WACC) :
(Coût moyen pondéré du capital, CMPC)

This is the average cost of capital invested in the business, that is weighted by the portions that are Debt, Preferred Equity and Common Equity.

          Cost of              Cost of               Cost of
            Debt          Preferred Equity        Common Equity
WACC = -------------- + --------------------- + ------------------
        Market Value        Market Value           Market Value
          of Debt        of Preferred Equity     of Common Equity

Working Capital :
(Fonds de roulement [positif] - Besoin en fonds de roulement [négatif])

This is the capital that finances continuing operations of the company. It is normally used to manufacture, sell, and receive payment for its products and services.

Working Capital = Current Assets - Current Liabilities.