ABM - Balance Sheet management Formulaes

ABM - Balance Sheet management
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1. Net worth =  A) Excess of assets over liabilities( for individual) B) Capital + Reserve (for company) 

2. Networking Capital =  A) Total of current asset-Total of current liability B) Difference b/w long term source and long term use 

3. Debt Equity ratio (DER) = A) Term loan/Tangible networth B) Long term debt/Share holders equity C) Total liability/Share holders equity

4. DSCR = A) Total cash flow before interest/Total repayment obligation B) ( Net profit + Depriciation + Interest on long term liability )/ (Instalment + interest on long term liability) 

5. Return on asset = Operating profit/(Total asset-intangible asset) 

6. ICR(Interest coverage ratio )= EBIT / Interest on long term borrowings Where EBIT = Earning before interest and taxes 

7.Total outside liabilities= current liability + long term liability 

8. Total tangible asset = CA+ Fixed asset+ other non currrent asset 

9. Tangible networth = Networth - intangible asset 

10. Current Ratio = CA:CL 

11. Quick Ratio = ( CA - Inventories )/ CL 

12. Quick asset = CA - Inventory 

13. Heads that come under current asset→
Inventory, Preliminary Expenses/prepaid expenses, Cash and bank balance, Sundry debtors/Bill reicivables, Investment in qouted securities such as Govt sec , FDR

14. Heads that come under liabilities ->
 Sundry creditors/Bills payable, Installment of term loan payable in a year, prefrential capital, Provisions to paid in a year, WCTL( Working capital term loan )