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20 Cards in this Set
- Front
- Back
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Return on Equity (ROE)
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Net Income
Average Stockholders Equity Equity This measure indicates how much income was earned for every dollar invested by the owners. |
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Return on Assets (ROA)
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Net Income + Interest Expense (net of tax)
Average Total Assets This ratio is generally considered the best overall measure of a company’s profitability. |
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Financial Leverage Percentage
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Return on Equity – Return on Assets
Financial leverage is the advantage or disadvantage that occurs as the result of earning a return on equity that is different from the return on assets. |
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Quality of Income
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Cash Flow from Operating Activities
Net Income Ratio >1: high-quality earnings Ratio <1: lower-quality earnings |
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Profit Margin
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Net Income
Net Sales Revenue This ratio measures a company’s ability to generate sales given an investment in fixed assets. |
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Fixed Asset Turnover
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Net Sales Revenue
Average Net Fixed Assets This ratio measures a company’s ability to generate sales given an investment in fixed assets. |
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Cash Ratio
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Cash + Cash Equivalents
Current Liabilities This ratio measures the adequacy of available cash. |
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Current Ratio
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Current Assets
Current Liabilities This ratio measures the ability of the company to pay current debts as they become due. |
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Quick Ratio
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Quick Assets
Current Liabilities This ratio is like the current ratio but measures the company’s immediate ability to pay debts. |
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Receivable Turnover Ratio
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Net Credit Sales
Average Net Receivables This ratio measures how quickly a company collects its accounts receivable. |
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Inventory Turnover Ratio
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Cost of Goods Sold
Average Inventory This ratio measures how quickly the company sells its inventory. |
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Accounts Payable Turnover
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Cost of Goods Sold /
Average Accounts Payable This ratio measures how quickly the company pays its accounts payable. |
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Times Interest Earned Ratio
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Net Income+Interest Expense+
Income Tax Expense Interest Expense This ratio indicates a margin of protection for creditors. |
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Cash Coverage Ratio
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Cash Flow from Operating Activities Before Interest and Taxes
Interest Paid This ratio compares the cash generated with the cash obligations of the period. |
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Earnings Per Share (EPS)
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Net Income
Average Number of Shares of Common Stock Outstanding Earnings per share is probably the single most widely watched financial ratio. |
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Debt to Equity Ratio
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Total Liabilities
Stockholders Equity This ratio measures the amount of liabilities that exists for each $1 invested by the owners. |
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Capital Acquisitions Ratio
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Net Cash Flow from Operating Activities
Cash paid for property,plant,& Equipment A high ratio indicates less need for outside financing for current and future expansion. |
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Price/Earnings Ratio (P/E Ratio)
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Current Market Price Per Share
Earnings Per Share This ratio measures the relationship between the current market price of the stock and its earnings per share. |
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Dividend Yield Ratio
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Dividends Per Share
Market Price Per Share This ratio is often used to compare the dividend-paying performance of different investment alternatives. |
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Total Asset Turnover Ratio
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Net Sales
Average Total Assets Measures the sales generated per dollar of assets. |
