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13 Cards in this Set
- Front
- Back
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Liquidity ratio
Current ratio When it is used with acid test ratio it will give a better picture because some times items like inventory an prepaid expences will not be salable immediately |
Current assets /. Current liability
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Liquidity
Acid - test ratio When it is used with acid test ratio it will give a better picture because some times items like inventory an prepaid expences will not be salable immediately |
Cash + marketable securities + receivables ( net ) /. Current liability
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Liquidity
Inventory turnover The number of times on average the inventory is sold during the period , the liquidity of the inventory Average inventory can be computed from the beginning and ending invetory balace |
Cost of goods sold / average inventory
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Liquidity
Revivable turnover Assess the liquidity of the receivable and how quickly certain assets can be converted to cash |
Net credit sales / average net receivables
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Profitability
Price-earning ratio Will measure to what extend the market price is realistic by comparing earning per share |
Market price per share / earning per share
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Profitability
Return on assets An overall measurof profitability |
Net income / average assets
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Profitability
Earning per share ( eps ) |
Net income / weighted average common shares outstanding
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Profitability
Percetige of each dollars of sales that results in net income The more the good |
Net income / net sales
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Profitability
Assets turn over How efficiently a company uses it's assets to generate sales |
Net sales / average assets
Average assets ( beg + ending ) / 2 |
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Test
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Tesdg
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Solvency ratios
Debt to total assets ratio |
Total debt / total assets
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Solvency
Time intrest earning ratio An indicataer of the company ability to meet intrest payment as become due |
Income before income taxes and intrest expens / intrest expense
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S Corporation
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Corporation electing to be taxed like a partnership and yet retaining other advantages of the coporation form
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