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35 Cards in this Set

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Current Ratio

Current Assets / Current Liabilities

measures a company's ability to pay short-term and long-term obligations

Quick Ratio (aka Acid Test)

Current Assets - Inventory / Current Liabilities



measures a company’s ability to meet its short-term obligations with its most liquid assets

Inventory Turnover Ratio

COGS / Inventory

how efficient management is at managing company inventory and generating sales from it.

Assets Turnover Ratio

Revenues / Total Assets



used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.

Debt to Asset Ratio

Total Debt / Total Assets



Total debt to total assets is a leverage ratio that defines the total amount of debt relative to assets.
The higher the ratio, the higher the degree of leverage, and consequently, financial risk

Times Interest Earned

EBIT / Interest Expense

How well interest can be paid back. This number should be high preferably



Return on Assets (ROA)

Net Income / Total Assets

an indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings

Return on Equity (ROE)

Net Income / Total Equity
Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested

Dupont Analysis

ROE = Net Profit Margin * Asset Turnover * Leverage Ratio

Assets are measured at their gross book value rather than at net book value to produce a higher return on equity (ROE)

Gross Profit Margin

Gross Profit / Revenue

Used to assess a company's financial health and business model by revealing the proportion of money left over from revenues after accounting for the cost of goods sold (COGS).

Net Income Margin

Net Income / Revenue

Shows how much of each dollar collected by a company as revenue translates into profit

Leverage Ratio (LEV)

Total Assets / Total Equity

looks at how much capital comes in the form of debt (loans), or assesses the ability of a company to meet financial obligations.

Book Value Per Share (BVPS)

Total Equity / No of Shares

The book value of equity per share is one factor that investors can use to determine whether a stock price is undervalued. If a business can increase its BVPS, investors may view the stock as more valuable, and the stock price increases

Economic value added (EVA)

Net Operating Profit After Tax -


(Capital Invested x WACC)

A measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit, adjusted for taxes on a cash basis.

Price-Earnings Ratio (P/E)

Price Per Share / Earnings per Share

measures its current share price relative to its per-share earnings.

Price-to-Book (P/B)

Price Per Share / (Total Assets -


Intangible Assets and Liabilities)

AKA Price-Equity Ratio




used to compare a stock's market value to its book value.

Days Sales Outstanding

Accounts Receivable /


(Total Credit Sales / # of days)

a measure of the average number of days that a company takes to collect revenue after a sale has been made

Earning Power

EBIT / Total Assets

a business' ability to generate profit from conducting its operations.

Sustainable Growth Formula

Growth = (ROE) * (Retention Rate)


a business' ability to generate profit from conducting its operations.

Cash Ratio

Cash / Current Liabilities


a business' ability to generate profit from conducting its operations.

Net Profit Margin

Net Income / Revenue

net profit margins show how much of each dollar collected by a company as revenue translates into profit.

Return on Sales

EBIT / Revenue

used to evaluate a company's operational efficiency

provides insight into how much profit is being produced per dollar of sales

Receivable Turnover Ratio

Net Credit Sales / Avg Accounts Receivable

used to quantify a firm's effectiveness in extending credit and in collecting debts on that credit.




measures how efficiently a firm uses its assets

Debt Ratios

Debt Ratio


Leverage Ratio


Times Interest Earned Ratio

Liquidity Ratios

Current Ratio


Quick Ratio (Acid Test)

Profitability Ratios

Net Profit Margin


Return on Assets (ROA)


Return on Equity (ROE)
Gross Profit Margin


Net Profit Margin


Earning Power

Efficiency Ratios

Inventory Turnover


Days Sales Outstanding


Assets Turnover

Revenue

Sales

Sales

Revenue

EBIT

Earnings before Interest and Taxes

EBT

Earnings before Taxes

COGS

Cost Of Goods Sold

OIROI

EBIT / Total Assets

Operating Income (OI)

same as EBIT

NOPAT

Net Operating Profit After Taxes