Dimension 4 formulas_240401_081808 (1).docx

Cash Flow Ratio Analysis Average days in cash cycle = AVERAGE DAYS Sales in receivables + Average days COGS in inventory - Average days COGS in Payable Current assets - Current liabilities = Net working capital CASH MARGIN RATIO (DIRECT OR UCA DIRECT CASH FLOW) = Cash gross profit /Net cash from sal...

Cash Flow Ratio Analysis Average days in cash cycle = AVERAGE DAYS Sales in receivables + Average days COGS in inventory - Average days COGS in Payable Current assets - Current liabilities = Net working capital CASH MARGIN RATIO (DIRECT OR UCA DIRECT CASH FLOW) = Cash gross profit /Net cash from sales DSCR (INDIRECT CASH FLOW) = Net income + Depreciation + Amortization /CPLTD FIXED CHARGE COVERAGE RATIO (INDIRECT CASH FLOW) = Earnings before Interest and taxes (EBIT) + Lease and rental expense / Interest expense + Lease and rental expense + CPLTD CASH COVERAGE RATIO (UCA DIRECT CASH FLOW) = Net cash after operations/ Financing costs + CPLTD Sales factors SALES GROWTH%= (Sales Year n+1 – Sales Year n x 100 (%)) / Sales Year n Total cash impact of SALES GROWTH% = (year n end A/R * n+1 sales growth % ) + (year n end Inv * n+1 sales growth % ) + year n end A/P * n+1 sales growth % ) Fundamental factors (cost control) GPM (+) GROSS PROFIT MARGIN = (Gross profit x 100 (%))/ Net sales Change in GPM = (GPM year n+1) - (GPM year n) Total Cash impact GPM= Change in GPM* year n+1 sales $$$ OPEX% (-) OPERATING EXPENSE % = Operating Expense x 100 (%) / Net Sales Change in OPEX % = (OPEX% year n+1) - (OPEX % year n) Total Cash impact OPEX% = -( Change in OPEX %* year n+1 sales $$$) Swing factors A/R (-) ACCOUNTS RECEIVABLE (DAYS) = (Accounts Receivable x 365)/ Net Sales = 365/ A/R turnover Change in A/R (Days) = (A/R (Days) yearn+1) - ( A/R (Days) yearn) Total Cash impact A/R (each day) = -((Change A/R (Days) * year n+1 sales $$$)/365) INV (-) Inventory (DAYS) = (inventory x 365)/ COGS = 365/ inv turnover Change in Inventory (Days) = (Inv (Days) year n+1) - (Inv (Days) year n) Total Cash impact Inv (each day) = - ((Change Inv (Days) * year n+1 sales $$$)/365) A/P (+) A/P (DAYS) = (A/P x 365)/ COGS = 365/A/P turnover Change in A/P (Days) = (A/P(Days) year n+1) - (A/P (Days) year n) Total Cash impact (each day)= +(Change A/P (Days) * year n+1 sales $$$)/365 Alternates Alternates most often used to communicate with borrowers Earnings before interest, taxes, depreciation, and amortization (EBITDA). Free cash flow = Net cash from operations - cap ex - other investments - interest expense net of tax benefit (interest *( 1- tax rate))