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29 Cards in this Set
- Front
- Back
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Net Working Capital
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Total current assets minus total current liabilities
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Operating Income
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Earnings before Interest and Taxes
(shown in income statement) |
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common sized balance sheet or income statement
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present percentages rather than dollar figures. [Each balance sheet account is stated as a percentage of total assets; each income statement account is presented as a percentage of total sales
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ratio
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a comparison of two values from a company’s most recent balance sheet, or from its most recent income statement, or one figure each from the most recent balance sheet and income statement.
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4 groups of ratios
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liquidity (short term solvency) ratios
asset management ratios debt management (long term solvency) ratios profitability ratios |
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Liquidity (short term solvency) ratios:
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indicate whether the company appears able to pay the money it owes in the short run (during the next year), based on the most recent balance sheet “snapshot” figures.
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Examples of Liquidity (short term solvency) ratios:
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Current Ratio
Quick Ratio |
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Current Ratio
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Current Assets/Current Liabilities
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Quick Ratio
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Current Assets other than Inventory/Current Liabilities
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. Asset Management Ratios:
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indicate whether the company is using specified assets efficiently in generating sales.
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Examples of Asset Management Ratios
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Inventory Turnover
Fixed Asset Turnover Total Asset Turnover |
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Inventory Turnover
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Sales/Inventory
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Fixed Asset Turnover
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Sales/Net Fixed Assets
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Total Asset Turnover
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Sales/Total Assets
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Receivable Turnover Rate
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Sales/Accounts Receivable
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Days' Sales in Receivables
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Accounts Receivable/Average Sales per 365 (day)
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Times Interest Earned Ratio
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EBIT/Interest
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Debt Ratio
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Total Liabilities/Total Assets
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Debt to Equity Ratio
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Total Liabilities/Equity
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Equity Multiplier
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Total Assets/Equity
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Debt Equity Ratio + 1
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Equity Ratio
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Profit Margin
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Net Income/Sales
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ROA
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Net Income/Total Assets
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ROE
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Net Income/Equity
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ROIC
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EBIT(1-Tax Rate)/Total Assets
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EVA
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NOPAT - [(Total Assets)(%Cost of Providing Investor Returns)]
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NOPAT
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(EBIT) (1 – t)
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DuPont ROA
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ROA= PM X TAT
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DuPont ROE
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ROE= ROA X EM
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