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Operating Income, divided by Net Sales = ROROS Ratio. This ratio illustrates how much net profit was derived from every dollar of sales. It helps indicate if the business is generating enough sales to cover fixed costs and leave an acceptable residual profit.

This ratio is sometimes called the business' return on investment. It measures the overall effectiveness of management in generating profits with its available assets. Net Profits after taxes, divided by Total Assets = ROA.

The ROE measures the return earned by the owners' (preferred and common stockholders) investment in the business. Net Profit after taxes divided by stockholders Equity = ROE.

This ratio illustrates the average number of days it takes to collect cash from the business' credit sales. Accounts Receivable, divided by (Annual Sales, divided by 365)= the Average Collection Period. The Average Collection Period is meaningful only in relation to the business' credit terms.

The ratio illustrates the average amount of time needed to pay the companies accounts payables. The ratio is calculated by taking the Accounts Payable amount divided by (Annual purchases divided by 365)

This ratio illustrates how many times your initial inventory is replaced in a year. Cost of Goods Sold, divided by Average Inventory = IT Ratio. Also, Days in the year, divided by the Inventory Turnover Ratio = Number of days in Inventory Ratio. Faster turnovers are viewed as a positive trend. The result is meaningful only when compared to other businesses in the same industry or the same business' past inventory turnover.

This Ratio measures the efficiency with which a business has been using its fixed or earning assets to generate sales. Sales, divided by Net Fixed Assets = FAT Ratio.

The EPS represents the number of dollars earned on behalf of each outstanding share of common stock. Earnings available for common stockholders divided by the number of shares of common stock outstanding = EPS. EPS is an amount earned on behalf of each share outstanding. It does not represent the amount of earnings actually distributed to shareholders.

The P/E Ratio reflects the amount investors are willing to pay for each dollar of the business's earnings. The higher the P/E Ratio, the greater the investors’ confidence in the firm. The P/E ratio represents the "multiple" that the stock market places on the earnings of a company. Market price per share of common stock divided by Earnings per share of common stock = P/E Ratio.

The Dividend Yield is the relationship between cash dividends paid to shareholders and the market price per share of common stock. Dividends per share of common stock, divided by the Market price per share of common stock = Dividend Yield.