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16 Cards in this Set
- Front
- Back
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Profitability Ratio Definition |
Measures the income or operating success of a company for a given period of time |
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Liquidity Ratio Definition |
Measures the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash |
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Solvency Ratio Definition |
Measures the ability of the company to survive over a long period of time |
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Liquidity Ratio Formula |
= Current Assets / Current Liabilities |
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Debt to Assets Ratio Definition |
Measures the percentage of total financing provided by creditor rather than stockholders |
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Debt to Assets Ratio Formula |
Total Liabilities / Total Assets |
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Earnings Per Share (EPS) Definition |
Measures the net income earned on each share of common stock |
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Earnings Per Share (EPS) Formula |
(Net Income - Preferred Div) / Common Shares Outstanding |
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Liquidity |
The ability to pay obligations expected to become due within the next year or operating cycle |
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Working Capital Definition |
The difference between the amounts of current assets and current liabilities |
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Working Capital Formula |
Current Assets - Current Liabilities |
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Solvency |
The ability to pay interest as it comes due and to repay the balance of a debt due at its maturity |
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Solvency Ratio |
Measures the ability of the company to survive over a long period of time |
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Income Statement Flowthrough |
Net Income |
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Retained Earnings Statement Flowthrough |
Ending Retained Earnings |
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Four types if Financial Statements |
1. Income Statement 2. Retained Earnings 3. Balance Sheet 4. Statement of Cash Flows |
