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19 Cards in this Set
- Front
- Back
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Horizontal Analysis
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A comparison of financial statement items over a period of time.
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Vertical Analysis
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A comparison of various financial statement items within a single period with the use of common-size statements.
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Liquidity
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The nearness to cash of the assets and liabilities.
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Current Ratio
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current assets / current liabilities
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Gross Profit Ratio
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Gross Profit / net sales
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Acid (quick)test Ratio
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cash + marketable securities + current receivables / Current Liabilities
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Inventory Turnover Ratio
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Cost of goods sold / average inventory
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Number of days sales in inventory
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360* / inventory turnover
*# of days in a period |
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Accounts Receivable Turnover Ratio
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Net Credit Sales / Average Accounts Receivable
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Number of days sales in receivable
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360 / accounts receivable turnover
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Solvency
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The ability of a company to remain in business over the long term.
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Times interest earned
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net income + interest expense + income tax expense / interest expense
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Debt to Equity Ratio
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Total Liabilities / Total Stockholders Equity
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Debt to Assets Ratio
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total liabilities / total assets
*smaller the ratio the better |
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Profitability
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How well management is using company resources to earn a return on the funds invested by various groups.
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Gross Profit Ratio
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Gross Profit / Net Sales
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Profit Margin on Sales Ratio
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Net Income / Net Sales
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Return on Assets
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Net income + interest expense, net of tax (1-.?) / average total assets
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Return on Stockholders Equity
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Net income - preferred dividends / average common stockholders equity
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