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;
16 Cards in this Set
- Front
- Back
- 3rd side (hint)
|
Which company is more profitable? |
Net income/sales |
Profit margin on sales |
|
|
Profitability-capital intensive companies |
Net income/average total assets |
Return in assets |
|
|
Most profitable from stockholders' perspectice |
Net income/average stockholders equity |
Return on stockholders equity |
|
|
Profitability of labor intensive company |
Net income/average # of employees |
Profit per employee |
|
|
Is company in danger of needing cash over next year? |
Current ratio=current assets/current liabilities |
Liquidity ratio |
|
|
Which company has least risk of paying off debt? |
Debt to equity=total liabilities/total equity
(Lower)
(higher = more leveraged) |
Solvency Leveraged |
|
|
Which company is more likely to be able to pay their interest? (Income statement) |
TIE = (net income + interest expense + tax expense) / interest expense |
Serviceability |
|
|
Which company is more likely to be able to pay their interest? (Cash flow statement) |
TIE = (Cash flow from operations + interest paid) / interest paid |
Serviceability |
|
|
Which company has higher expectations for growth? |
P/E Ratio= (market price per share) / (earnings per share) |
P/E ratio |
|
|
Earnings per share (and when to use) |
(Net income - PS dividends) / (average shares outstanding)
Only use for same company analysis |
|
|
|
Dividend payout |
Dividends paid / net income
Or
Dividends per share/EPS |
Less earnings retained, thus more cash is returned to stockholders |
|
|
Dividend yield |
Dividends per share / current stock price |
Faster return on investment |
|
|
Calc end retained earnings from beg retained earnings |
Beginning Retained Earnings + Net Income - Dividends = End Retained Earnings |
|
|
|
Growth rate % |
(TY - LY) / LY |
|
|
|
Calc outstanding shares using treasury shares |
Issued shares - treasury shares = outstanding shares |
|
|
|
Measure change in stockholders wealth in period |
TSR = (Stock price accumulation + dividends per share) / (beginning of period stock price) |
Total stockholder return |
