Cash Earning per Share Formula (Cash EPS)

Cash Earning per Share Formula is used by the investors and analysts to find the financial performance of the company. Cash EPS Formula has the following 2 equations.

Cash EPS= Operating Cash flow/Number of Shares Outstanding

OR

Cash EPS = [Net Income + Depreciation and amortization x ( 1- Tax )]/Number of shares outstanding

In the first formula, there is the inclusion of the change in the working capital due to which both formulas have a different result. For the calculation of the accurate Cash EPS, identification of noncash element in the income statement is necessary. Here you can learn about the Definition of Cash earning per share.

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Debt to Capital Ratio Formula

Debt to Capital Ratio Formula is used to find the riskiness of the company. If the result given by the formula is greater then 1 for any company then the company has more debt as compared to its capital and the company is riskier.

If the result is less then 1 then the capital of the company is greater then the debt of the company and the company is less risky for investors.

Debt to Capital Ratio Formula can be calculated by dividing the total debt of the company by the sum of shareholder’s equity and total debt.

Debt to Capital Ratio Formula = Total Debt/(Total Debt + Shareholder’s Equity)

Total debt in the formula represent all the long term and short term liabilities and Shareholder’s equity represents the company’s all equity. You can also learn about Debt to Capital Ratio.

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Cash Ratio Formula

Cash Ratio Formula used by the creditors to find the efficiency of the company whether the company can pay off its current obligations with cash or cash equivalent or not. Cash Ratio Formula calculated by the sum of cash and cash equivalent and divide it by the total current liabilities of the company

Cash Ratio = ( Cash + Cash Equivalent )/ Total Current Liabilities

On the balance sheet, most of the companies list the cash and cash equivalent together. Some list both separately on the balance sheet. Cash equivalents are the assets or investment which can be converted in the cash within 90 days. Current Liabilities of the company are separate from the long term liabilities on the balance sheet. You can learn about the definition of Cash ratio.

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