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52 Cards in this Set
- Front
- Back
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Current Ratio Formula |
Current Assets ----------------------- Current Liabities |
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Acid-Test Ratio Formula |
Cash+Short-Term Investments+Current Receivables ------------------------------------------------------------------------ Current Liabilities Aka Quick Ratio |
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Accounts Receivable Turnover Formula |
Net Sales ------------------------------------------------- Average Accounts Receivable, net |
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Inventory Turnover Forumla |
Cost of Goods Sold ------------------------------ Average Inventory |
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Total Asset Turnover Formula |
Net Sales ------------------------------- Average Total Assets (last year's assets + this year's assets/2) |
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Debt Ratio Formula |
Total Liabilities ---------------------- Total Assets |
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Equity Ratio Formula |
Total Equity ------------------ Total Assets |
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Debt-to-Equity Ratio |
Total Liabilities ----------------------- Total Equity |
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Times Interest Earned Formula |
Income before Interest Expense and Income Taxes (sales + COGS + other expenses) ----------------------------------------------------------------------- Interest Expense |
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Profit Margin Ratio Formula |
Net Income ----------------- Net Sales |
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Gross Margin Ratio Formula |
Net Sales - Cost of Goods Sold -------------------------------------------- Net Sales |
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Return on Total Assets Formula |
Net Income --------------------------------- Average Total Assets (this year's assets + last year's assets/2) |
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Return on Common Stockholders' Equity Formula |
Net income - Preferred Dividends ------------------------------------------------------ Average Common Stockholders' Equity (Common Stock + Retained earnings/2) |
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Book Value per Common Share Formula |
Shareholders' Equity Applicable to Common Share (Net income - Preferred dividends) ----------------------------------------------------------------------- Number of Common Shares Outstanding (CS/ $ par value) |
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Basic Earnings per Share Formula |
Net Income - Preferred Dividends ---------------------------------------------------------- Weighted-average Common Shares Outstanding (CS/ $ par value average) |
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Price-Earnings Ratio Formula |
Market Price per Common Share (common stock market price; extra info) ----------------------------------------------- Earnings per Share (Net income- Preferred dividends / CS/$ par value) (same as basic earnings per share formula) |
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Dividends Yield Formula |
Annual Cash Dividends per Share (Dividends/ # of shares) ------------------------------------------------- Market Price per Share (common stock market price; extra info) |
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Product Cost |
GAAP sets rules for this Everything that goes into making the product whether dired, indirect, fixed, or variable Material, Labor, and Overhead |
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Period Costs |
Expenditures identified more with a time period than with finished products Administration, sales |
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Manufacturer Income Statement |
Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory ------------------------------------------------------- =Cost of Goods Sold |
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Flow of Manufacturing Activities |
*Materials Activity: Raw Materials beg inv, Raw Materials Purchases *Production Activity: Goods in Process Beg Inv, Raw Materials Used, Direct Labor Used, Factory Overhead Used *Sales Activity: Finished Goods beg inv, Goods manufactured |
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What makes up Average Total Assets |
Current Year's Assets + Last Year's Assets ------------------------------------------------------------ 2 |
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What makes up Total Liabilities |
Accounts Payable + Long-Term Notes Payable |
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What makes up Total Equity |
Common Stock + Retained Earnings |
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What makes up Current Total Assets |
Cash + Accounts Receivable + Inventory + Prepaid Expenses |
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Quick Current Assets (seen on acid test ratio) |
Cash + Accounts Receivables + Market Short Term Securities |
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Current Liabilities |
Accounts Payable, accrued liabilities |
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Average Stockholders Equity |
Common Stock + Retained Earnings ----------------------------------------------------- 2 *previous and current year's cs and re/2 |
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Current Assets |
Cash, Accounts receivable, current notes, inventory, prepaid expenses **NOT Power plant and Equipment** |
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Earnings per share |
Total earnings (net income - Preferred dividends) ------------------------------- outstanding shares (CS + RE/2) (avg) |
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Outstanding Shares |
Common stock amount ------------------------------------ Dollar par value |
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Horizontal Analysis |
Comparing multiple years Pick a base year (typically the oldest) Base year is always 100% Measured as percentage AKA Common Size statement |
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Vertical Analysis |
Base is revenue (the denominator) For each line, measure as a percent of revenue Revenue is always 100% Income statement and Balance sheet included |
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In a vertical analysis what is the denominator used from an income statement |
Revenues |
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In a vertical analysis, what is the denominator used from an Balance sheet |
Total Assets |
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Fixed Cost |
Cost that doesn't change |
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Variable Cost |
As production or quantity increases, their costs increase (or vise versa) |
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Direct Costs |
Traceable right to the product Material, labor |
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Indirect Costs |
Not directly traceable Overhead |
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Opportunity Cost |
For every choice you make, you are forgoing another option |
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Cost of Goods Sold for Manufacturers |
Beginning Inventory for finished goods + Cost of goods manufactured - ending inventory for finished goods |
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Process for manufacturers Raw Materials goes to what? |
Raw materials Work in Process (WIP) COGM (all of the WIP combined) Finished Goods Sold |
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What is work in process |
Materials pulled from raw materials Direct labor Overhead (using predetermined rate at first) |
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When one job is finished what happens to WIP? |
Credit work in process Debit Finished Goods |
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When overhead has a left over debit balance, what does that mean? |
Overhead was UNDER applied |
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When overhead as a left over credit balance, what does that mean? |
Overhead was OVER applied |
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How do you get a predetermined overhead rate? |
Overhead ------------------ Direct labor |
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Is Actual overhead a credit or debit balance Is Applied overhead a credit or debit balance |
Actual Overhead -- Applied Overhead Debit Credit |
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What happens to over applied or under applied overhead costs |
If under applied, credit overhead and put towards COGS and/or Finished Goods If over applied, debit overhead and put towards COGS and/or Finished Goods |
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How do you calculate Direct materials |
Beginning Raw Materials + purchases (purchase RM) - ending raw materials ------------------------------------------- Direct Materials |
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How to calculate Cost of Goods Manufactured |
Beginning WIP + Direct materials + Direct labor + Factory Overhead - Ending WIP --------------------------------- Cost of Goods Manufactured |
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How do you calculate Cost of Goods Sold for a manufacturing company |
Beginning Finished Goods + Cost of Goods Manufactured - Ending Finished Goods --------------------------------------------- Cost of Goods Sold
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