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23 Cards in this Set
- Front
- Back
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Current Ratio |
Measures current asset coverage of current liabilities. 1 or more is better. Less than 1 indicates less liquid |
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Quick Ratio/Acid Test |
More stringent measure of liquidity. Should be slightly lower than Current Ratio, but my also be an indicator of low levels of inventory |
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Working Capital |
Dollar Value of the Current Ratio. Positive number indicates more liquid than zero or negative number |
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Working Capital to Total Liabilities |
The larger the number, the more cash for A/P and Debt |
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Cash Equivalents to Current Liabilites |
Shows cash available to meet current obligations |
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Cost of Sales, Operating Expenses, Taxes to Current Assets |
Shows current assets available to meet operating activities. In this case number less than 1 is better. |
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Short-term Debt to Long-term Debt |
Increasing ratio means higher liquidity risk (more cash needed to cover debt) |
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Sales to Current Assets |
Larger number shows how efficient company uses its assets to generate sales. However, the larger the number, the higher the probability of inadequate Working Capital. |
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Return on Sales or Profit Margin |
Overall profit. Higher the number is better and an indicator of efficiency |
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Efficiency Ratio |
The lower the ratio, the more efficient (profitable) operations |
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Accounts Receivables Turnover |
The larger the number, the quicker A/R collections. More often (larger) is better. |
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Days Receivables |
Average number of days required to collect accounts receivable |
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Inventory Turnover |
The larger the number, the quicker inventory is being moved |
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Days Inventory |
Average number of days inventory on hand. Shorter is better. |
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Accounts Payable Turnover |
The larger the number, the quicker A/P payments. Measure of how readily bills are paid. More may be better, but management decision |
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Interest Coverage or Times Interest Earned |
Measures whether operating income covers debt servicing requirements. Higher is better. |
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Debt to Equity |
The smaller the number, the stronger the company against changes in the debt markets |
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Return on Assets |
Income generated from assets. Profitability measure. Higher is better. Benchmark depend on industry. |
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Return on Equity |
Income available for stockholders |
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Earnings Per Share (EPS) |
Key measure of company's performance to stockholders. |
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Price to Earnings Ratio |
Compares market price to earnings |
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Dividend Yield |
Compares dividends per share to market price |
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Economic Value Added |
Measures whether operations have increased stockholder wealth |
