Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
26 Cards in this Set
- Front
- Back
|
Income statement
|
A financial statement showing a firm's revenues and expenses during a specified period.
|
|
|
Balance sheet
|
An accounting statement of a firm's financial position of a specified time.
|
|
|
Statement of cash flows
|
A financial statement showing a firm's cash receipts and cash payments during a specified period.
|
|
|
Economic earnings
|
The real flow of cash that a firm could pay out without impairing its productive capacity.
|
|
|
Accounting earnings.
|
Earnings of a firm as reported on its income statement.
|
|
|
Return on equity (ROE)
|
The ratio of net profits to common equity.
|
|
|
Return on assets (ROA)
|
Earnings before interest and taxes divided by total assets.
|
|
|
DuPont system
|
Decomposition of profitability measures into component ratios.
|
|
|
Profit margin or return on sales
|
The ratio of operating profits per dollar of sales (EBIT divided by sales).
|
|
|
Total asset turnover (ATO)
|
The annual sales generated by each dollar of assets (sales/assets).
|
|
|
Interest coverage ratio or times interest earned
|
A financial leverage measure arrived at by dividing earnings before interest and taxes by interest expense.
|
|
|
Leverage ratio
|
Measure of debt to total capitalization of a firm.
|
|
|
Inventory turnover ratio
|
Cost of goods sold divided by average inventory.
|
|
|
Average collection period, or days receivables.
|
Accounts receivables per dollar of daily sales.
|
|
|
Current ratio
|
Current assets/current liabilities.
|
|
|
Quick ratio, or acid test ratio
|
A measure of liquidity similar to the current ratio except for exclusion of inventories.
|
|
|
Cash ratio
|
Another liquidity measure. Ratio of cash and marketable securities to current liabilities.
|
|
|
Market-to-book-value ratio
|
Market price of a share divided by book value per share.
|
|
|
Price-earnings ratio
|
The ratio of a stock's price to its earnings per share. Also referred to as the P/E multiple.
|
|
|
Earnings yield
|
The ratio of earnings to price, E/P.
|
|
|
Economic value aded, or residual income
|
A measure of the dollar value of a firm's return in excess of its opportunity cost.
|
|
|
LIFO
|
The last-in first-out accounting method of valuing inventories.
|
|
|
FIFO
|
The first-in first-out accounting method of valuing inventories.
|
|
|
Fair value or mark-to-market accounting
|
Use of current market values rather than historic cost in the firm's financial statements.
|
|
|
Quality of earnings
|
The realism and sustainability of reported earnings.
|
|
|
International financial reporting standards
|
A principles-based set of accounting rules adopted by around 100 countries around the world including the European Union.
|
