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21 Cards in this Set

  • Front
  • Back
four basic statements
statement of cash flows, balance sheet, statement of retained earnings, income statement
balance sheet
does co. earn enough assets to pay liabilities and still have $ left for dividends and SE?
income statement
indicates profit or no profit, can also see trends from year to year and get clues about future earnings
statement of retained earnings
policy on dividends affects ability to repay debts, evaluate whether co. favors dividends or retaining earnings for future growth
statement of cash flows
indicates to investors and creditors how obtained and spent $
deferral adjustments
cash exchanged before
accrual adjustments
cash exchanged after services
net profit margin ratio
net income/sales revenue
amount of income generated from each dollar of sales
indicates how well executives balance sales and expenses
PROFITABILITY
debt-to-assets
total liabilities/total assets
indicate the proportion of total assets financed by debt
lower is better
SOLVENCY
asset turnover ratio
sales revenue/ave total assets
sales revenue per dollar invested in assets, high number means efficient use of assets
PROFITABILITY
gross profit percentage
how much profit is made after deducting COGS
PROFITABILITY
fixed asset turnover
how much the company generates in sales for each dollar invested in fixed assets
PROFITABILITY
return on equity
compares the amount of net income to ave SE, reports the net amount earned as a percentage of each dollar contributed by stockholders
PROFITABILITY
earnings per share
amount of earnings generated for each share of common stock
PROFITABILITY
quality of income
relates operating cash flows to net income
PROFITABILITY
receivables turnover
level of accounts receivable relative to sales revenues
LIQUITIDY
inventory turnover
how frequently inventory is bought and sold
LIQUIDITY
current ratio
compares current assets to current liabilities
LIQUIDITY
times interest earned
how many times interest is covered by operating results
SOLVENCY
cash coverage ratio
how many times interest is covered by operatnig results
SOLVENCY
capital acquisitions ratio
compares cash flows from operations to cash paid for property and equipment
SOLVENCY