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10 Cards in this Set
- Front
- Back
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Current Ratio |
The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It tells investors and analysts how a company can maximize the current assets on its balance sheet to satisfy its current debt and other payables. |
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Current Ratio |
Current Assets ÷ Current Liabilities |
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Asset Turnover |
Asset turnover or asset turns is a financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue or sales income to the company. Companies with low profit margins tend to have high asset turnover, while those with high profit margins have low asset turnover. |
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Asset Turnover |
Net Sales ÷ Average Total Assets |
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Debt Ratio |
Debt Ratio is a financial ratio that indicates the percentage of a company's assets that are provided via debt. |
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Debt Ratio |
Total Debt ÷ Total Assets |
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Return on Assets (ROA) |
The return on assets shows the percentage of how profitable a company's assets are in generating revenue. |
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Return on Assets (ROA) |
Net Income ÷ Average Total Assets |
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Return on Equity (ROE) |
In corporate finance, the return on equity is a measure of the profitability of a business in relation to the equity, also known as net assets or assets minus liabilities. ROE is a measure of how well a company uses investments to generate earnings growth. |
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Return on Equity (ROE) |
(Net Income - Preferred Dividends) ÷ Average Total Equity |
