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6 Cards in this Set
- Front
- Back
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Is there a business here? |
-Revenue? -gross profit? -pos EBITDA? -net assets? -operating cash? -net cash flow pos on avg? |
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Ratios |
X divided by Y |
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ROCE |
Increase= using assets slightly more efficiently ROE & ROCE should increase together ROE= earnings level ROCE= OP level |
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Capital Employed |
If neg , short term liabilities = greater than ALL assets= insolvent |
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Acid Test Ratio |
>1 = company can meet short term obligations Decreasing = balance sheet over leveraged; or sales decreasing or paying its bills too quickly - increasing= revenue growth, collecting receivables & turning them into cash quickly & likely turning inventory over quickly - exc inventory |
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Current Ratio |
Current assets / current liabilities <1 not enough to pay all short term debt ATM but may once payments received >1= financial resources to remain solvent in short term Snapshot in time so usually not correct representation of company's liquidity Improving CR= Opportunity to invest in undervalued stock in a company turnover Could indicated better collection, turnover, debt payment |
