22 terms

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Comparative financial statements

Financial statements that provide information for multiple fiscal periods.

Current ratio

A ratio that measures the relationship of current assets to current liabilities.

Debt ratio

Total liabilities divided by total assets.

Dividend yield

The relationship between dividends per share and market price per share.

Earnings per share

Net income after federal income tax divided by the number of outstanding shares of stock.

Gross margin

Gross profit as a percent of net sales.

Horizontal analysis

A comparison of one item on a financial statement with the same item on a previous period's financial statement.

Liquidity ratio

A ratio that measures the ability of a business to pay its current financial obligations.

Market ratio

A ratio that measures a corporation's financial performance in relation to the market value of its stock.

Operating expense ratio

Total operating expenses as a percent of net sales.

Operating margin

Income from operations as a percent of net sales.

Payout ratio

The amount of dividends divided by net income.

Price-earnings ratio

The relationship between the market value per share and earnings per share of a stock

Profit margin

Net income after federal income tax as a percent of net sales.

Profitability ratio

A ratio that measures the ability of a business to generate income.

Quick assets

Cash and other current assets that can be quickly converted into cash.

Quick ratio

A ratio that measures the relationship of quick assets to current liabilities.

Rollover

The movement of funds from one qualified retirement plan to another.

Solvency ratio

A ratio that measures the ability of a business to pay its long-term liabilities.

Trend analysis

An analysis of changes over time.

Benchmark

A standard used to compare financial performance.

Working capital

The amount of current assets less current liabilities.