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17 Cards in this Set
- Front
- Back
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Current Ratio |
Current Assets _______________ Current Liabilities
Used to determine short term solvency of a company for creditors. |
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Quick Ratio (Acid Test Ratio) |
Current Assets - Inventory ___________________________ Current Liabilities
Used to determine short term solvency of a company for creditors without inventory because it takes the longest to liquidate. |
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Accounts Receivable Turnover Ratio |
Sales ______________________ Accounts Receivable
How often the Accounts Receivable is paid back (not sure) |
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Days Sales in Accounts Receivable |
Accounts Receivable ______________________ (sales / 365)
Measures company's ability to collect its credit sales in a timely manner. |
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Inventory Turnover Ratio |
Costs of Goods Sold _____________________ Inventory
The number of times the inventory is sold and restocked. |
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Days Cost of Goods Sold in Inventory |
Inventory ____________ (COGS / 365)
Shows how long it takes for inventory to be sold. |
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Fixed Asset Turnover Ratio |
Sales ______________ Net Fixed Assets
Measures how effectively the firm uses its plants and equipment to generate sales. |
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Total Asset Turnover Ratio |
Sales ____________ Total Assets
Measures the turnover of all the firm's assets |
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Debt Ratio |
Total Liabilities __________________ Total Assets
Measures the percentage of the firm's assets financed by borrowing |
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Debt to Equity Ratio |
Total Liabilities __________________________ Total Stockholder Equity
measures the firm's debt compared to their equity. |
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Times Interest Earned Ratio |
EBIT ___________ Interest
Measures how well a company's EBIT can pay the interest expenses. |
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Gross Profit Margin |
Sales - Cost of Goods Sold ______________________________ Sales
Measures the operating income with every dollar of sales. |
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Net Profit Margin |
Net Income ________________ Sales
Measures the profit per dollar of sales |
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Return on Assets (ROA) |
Net Income ________________ Total Assets
Indication of the return that the firm generates on its investment in assets. |
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Return on Equity (ROE) |
Net Income ___________________________ Total Stockholders Equity
measures the return that the firm generates on the funds provided by stockholders |
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Price to Earnings Ratio (P/E ratio) |
Market price per share __________________________ Earnings per share
Shows how much investors are willing to pay for the firm's stock for each dollar of reported profits. |
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Market to Book Ratio |
Market Price per share ____________________________ Book value per share
Shows how the investors are regarding the company (Not sure) |
