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11 Cards in this Set
- Front
- Back
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Return on Sales - ROS
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A measure of how much profit was created for every dollar of sales.
Net Income / Sales |
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Return on Assets - ROA
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A measure of how much profit was created for the assets gathered.
Net Income / Total Assets |
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Return on Equity - ROE
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A measure of how much profit was created with owners’ investments.
Net Income / Owners’ Equity |
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Earnings Per Share - EPS
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A measure of how much profit was created for each share of stock.
EPS = Net Income / Number of Shares Outstanding |
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Current Ratio
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Current Assets/Current Liabilities
A company’s ability to meet short-term debt obligations |
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Quick Ratio or Acid Ratio
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Current Assets - Inventory/Current Liabilities
A company’s ability to meet short-term debt obligations without including inventory. |
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Debt-to-Total Assets Ratio
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Total Debt/Total Assets
The percentage of funds that represent debt provided by creditors. |
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Leverage
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Total assets divided by owners’ equity.
leverage measures how “big” of a company the managers have created using the owners’ investments. |
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Turnover
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Sales divided by the value of total assets for the same period.
Asset turnover measures the amount of “activity” taking place in a business, or how active the assets are in regard to generating sales . |
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Price/Earnings Ratio
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The closing stock price divided by the earnings per share or EPS. The P/E is sometimes referred to as the earnings multiple, or simply, the multiple.
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Market Capitalization
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is the value that the stock market places on the firm—stock price times shares outstanding
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