Study sets matching "accounting ratios"

Study sets
Classes
Users

Study sets matching "accounting ratios"

Accounting Ratios
Current Ratio
Quick ("Acid Test") Ratio
Interest Coverage (Times Interest Earn…
Return on Assets (ROA)
Current Assets/Current Liabilities... Firm's ability to meet it…
(Cash + Marketable Securities + Accounts Receivable)/Current…
EBIT/Interest Expense... Indicates the relative protection that…
Net Income/Average Total Assets... Firm's performance in using…
Current Ratio
Current Assets/Current Liabilities... Firm's ability to meet it…
Quick ("Acid Test") Ratio
(Cash + Marketable Securities + Accounts Receivable)/Current…
11 terms
Accounting Ratios
Return on Capital Employed (ROCE)
Gross Profit Margin (GP to Sales Ratio)
Mark Up
Expenses/Overheads to Sales
Shows how good the business is at using the money invested in…
Shows the % of sales that is retained as Gross Profit
Shows the % added to the cost to arrive at the selling price
Shows the % of turnover/sales used to pay expenses/overheads
Return on Capital Employed (ROCE)
Shows how good the business is at using the money invested in…
Gross Profit Margin (GP to Sales Ratio)
Shows the % of sales that is retained as Gross Profit
11 terms
Accounting Ratios
Return on Capital Employed (ROCE)
Gross Profit Margin (GP to Sales)
Mark Up
Expenses/Overheads to Sales
Profit for the Year or Profit from Operations/Capital x 100 (…
Gross Profit/Sales x 100 (Profitability)
Gross Profit/Cost of Sales x 100 (Profitability)
Expenses/Sales x 100 (Profitability)
Return on Capital Employed (ROCE)
Profit for the Year or Profit from Operations/Capital x 100 (…
Gross Profit Margin (GP to Sales)
Gross Profit/Sales x 100 (Profitability)
Accounting Ratios
Stock Turnover
Period of Credit Allowed
Period of Credit Recieved
Return on Capital Employed
Stock Turnover
Period of Credit Allowed
10 terms
Accounting Ratios
Debt to Equity
Current
Return On Investment
Gross Margin
Total Debt/Total Shareholders Equity
Current Assets/Current Liabilities
Net Income/Average Total Assets
Gross Margin/Sales
Debt to Equity
Total Debt/Total Shareholders Equity
Current
Current Assets/Current Liabilities
Accounting Ratios
current ratio
quick or acid test
return on equity
return on capital employed
the higher this ratio, the more able a company is to pay back…
an indicator of whether a firm has enough short term assets t…
compares net income to average shareholder equity; measures h…
possibly better than return on equity because it shows how we…
current ratio
the higher this ratio, the more able a company is to pay back…
quick or acid test
an indicator of whether a firm has enough short term assets t…
12 terms
Accounting Ratios
Current Ratio (Up or down?)
Current Ratio
Gross Margin Ratio (Up or down?)
Gross Margin Ratio
^ 2:1 Ratio is good, Used with the Balance Sheet
Explains what a comfortable amount of working capital is, the…
^ is better shows direct profit from sales, Used with the Inc…
It is the excess of Sales of COGS, it generally shows profita…
Current Ratio (Up or down?)
^ 2:1 Ratio is good, Used with the Balance Sheet
Current Ratio
Explains what a comfortable amount of working capital is, the…
18 terms
Accounting Ratios
Gross Profit Percentage
Return on Sales
Asset Turnover
Return on assets
Gross Profit/Net sales
Net Income/Net Sales
Net sales/Average total assets
Net Income/Average total assets
Gross Profit Percentage
Gross Profit/Net sales
Return on Sales
Net Income/Net Sales
11 terms
Accounting Ratios
Return on Equity (ROE)
Earnings per Share (EPS)
Profit Margin
Current Ratio
Net Income/Average SE
Net Income/Average # of common shares outstanding
Net Income/Net Sales
Current Assets/Current Liabilities
Return on Equity (ROE)
Net Income/Average SE
Earnings per Share (EPS)
Net Income/Average # of common shares outstanding
Accounting Ratios
Return on equity ratio (profitability…
Debt to equity ratio (leverage ratio)
Current ratio (solvency ratio)
Inventory turnover ratio (asset turnov…
Net income/average stockholder's equity
Average total liabilities/average stockholder's equity
Current assets/current liabilities
Cost of goods sold/average inventory
Return on equity ratio (profitability…
Net income/average stockholder's equity
Debt to equity ratio (leverage ratio)
Average total liabilities/average stockholder's equity
13 terms
Accounting ratios
Current ratio
Acid test ratio
Receivables turn over ratio
Inventory turn over ratio
Current assets/current liabilities
Cash+short term investments+net receivables/current liabilities
Net credit sales/avg receivables
Cogs/avg inventory
Current ratio
Current assets/current liabilities
Acid test ratio
Cash+short term investments+net receivables/current liabilities
accounting ratios
current ratio
quick (acid test) ratio
accounts receivables turnover
days' sales outstanding
current assets // current liabilities
(cash + short term investments + net current receivables) //…
net credit sales // average net accounts receivable
365 // accounts receivable turnover
current ratio
current assets // current liabilities
quick (acid test) ratio
(cash + short term investments + net current receivables) //…
12 terms
Accounting Ratios
Working Capital
Current Ratio
Inventory Turnover
Days in Inventory
Current Assets - Current Liabilities
Current Assets/Current Liabilities... Determines dollars of ass…
COGS/Avg. Inventory... Indicates the liquidity of inventory by…
365 days/Inventory Turnover... Avg number of days inventory is…
Working Capital
Current Assets - Current Liabilities
Current Ratio
Current Assets/Current Liabilities... Determines dollars of ass…
14 terms
Accounting Ratios
Current Ratio
Quick Ratio
Accts R Turnover
Days Sales in Accts R
Current Assets / Current Liabilities
(Cash + Short-Term Investments + Accts R) / Current Liabilities
Net Credit Sales / Avg Net Accts R
365 / Accts R Turnover
Current Ratio
Current Assets / Current Liabilities
Quick Ratio
(Cash + Short-Term Investments + Accts R) / Current Liabilities
Accounting Ratios
Dividend
Retained Earnings Equation
Equity Equation
Increase Debit:
Owner's Equity
BegRE + NI - D = EndRE
Capital Stock + Retained Earnings
Assets, Expenses, & Dividends
Dividend
Owner's Equity
Retained Earnings Equation
BegRE + NI - D = EndRE
17 terms
Accounting Ratios
Return on Equity
Return on Assets
Financial Leverage Percentage
Earnings Per Share
net income/average stockholders' equity
Net Income + Interest expense (Net interest * 1-tax rate)/ av…
Return on Equity- Return on Assets
Net Income/average number of shares of common stock outstanding
Return on Equity
net income/average stockholders' equity
Return on Assets
Net Income + Interest expense (Net interest * 1-tax rate)/ av…
20 terms
Accounting Ratios
Working Capital
Current Ratio
Cash Ratio
Acid/Quick Ratio
H! A business's ability to meet its short term obligations wi…
H! The company's ability to pay current liabilities from curr…
H! The company's ability to pay current liabilities from cash…
H! The company's ability to pay all its current liabilities i…
Working Capital
H! A business's ability to meet its short term obligations wi…
Current Ratio
H! The company's ability to pay current liabilities from curr…
16 terms
Accounting Ratios
Gross Profit Margin
Return on Sales (Net Profit Margin)
Asset Turnover
Return on Assets
Gross Profit/Net Sales
Net Income/Net Sales
Net Sales/Average Total Assets
Net Income/Average Total Assets
Gross Profit Margin
Gross Profit/Net Sales
Return on Sales (Net Profit Margin)
Net Income/Net Sales
12 terms
Accounting Ratios
Profit Margin
Gross Profit Percentage
Current Ratio
Quick Ratio
Net Income/Net Sales
Gross Profit/Net Sales
Current Assets/Current Liabilities
Quick Assets/Current liabilities
Profit Margin
Net Income/Net Sales
Gross Profit Percentage
Gross Profit/Net Sales
11 terms
accounting ratios
current ratio
acid test
receivable turnover
inventory turnover
current assets/current liabilites
(cash + ST investment + net receivables)/current liabilites
net credit sales/average net receivables
cost of goods sold/average inventory
current ratio
current assets/current liabilites
acid test
(cash + ST investment + net receivables)/current liabilites
Accounting Ratios
current ratio
debt to equity ratio
receivables turnover ratio
inventory turnover ratio
current assets/current liabilities
total liabilities/owner's equity
net sales (or credit sales)/average accounts receivable
COGS/average inventory
current ratio
current assets/current liabilities
debt to equity ratio
total liabilities/owner's equity
9 terms
Accounting Ratios
Asset Turnover Ratio
Inventory Turnover Ratio
Current Ratio
Accounts Receivable Turnover Ratio
Net Sales/Total Assets
COGS / Average Inventory
Current Assets / Current Liabilities
Net Credit Sales / Average Receivables
Asset Turnover Ratio
Net Sales/Total Assets
Inventory Turnover Ratio
COGS / Average Inventory
15 terms
Accounting Ratios
Debt Ratio
Current Ratio (Liquidity - DPF)
Return on Sales (Profitability - DPF)
Asset Turnover (Efficiency)
Total Liabilities / Total Assets... ... (represents the proportion…
Current Assets / Current Liabilities ... (ability to pay its de…
Net Income / Sales ... (pennies of profit on every dollar of sa…
Sales / Total Assets... (overall measure of company efficiency…
Debt Ratio
Total Liabilities / Total Assets... ... (represents the proportion…
Current Ratio (Liquidity - DPF)
Current Assets / Current Liabilities ... (ability to pay its de…
accounting ratios
current ratio
working capital
gross profit rate
net income
ca/cl
ca-cl
gross profit/net sales
net income/net sales
current ratio
ca/cl
working capital
ca-cl
34 terms
Accounting Ratios
current ratio
quick or acid test
return on equity
return on capital employed
the higher this ratio, the more able a company is to pay back…
an indicator of whether a firm has enough short term assets t…
compares net income to average shareholder equity; measures h…
possibly better than return on equity because it shows how we…
current ratio
the higher this ratio, the more able a company is to pay back…
quick or acid test
an indicator of whether a firm has enough short term assets t…
22 terms
accounting ratios
Cash
Current
accounts receivables turnover
average collection period
cash+ marketable securities / total assets
current assets/ current liabilities
total revenue / AR
365 days / (total revenue / AR)
Cash
cash+ marketable securities / total assets
Current
current assets/ current liabilities
11 terms
Accounting Ratios
Analyzing Liquidity
Current Ratio
Quick Ratio
Merchandise Inventory Turnover
analyze the ability of the business to pay current liabilitie…
current assets / current liabilities... - indicates whether a co…
cash + A/R + marketable securities (investments) / current li…
cost of goods sold / average inventory... - indicates the number…
Analyzing Liquidity
analyze the ability of the business to pay current liabilitie…
Current Ratio
current assets / current liabilities... - indicates whether a co…
24 terms
Accounting Ratios
Profit Margin
Return on Equity
Return on Assets
Earnings Per Share
Net Income/Net Revenue ... *Profitability
Net Income/Average Common Equity ... *Profitability
Net Income/Average Total Assets ... *Profitability
Net Income/Average Number of Common Shares Outstanding ... *Prof…
Profit Margin
Net Income/Net Revenue ... *Profitability
Return on Equity
Net Income/Average Common Equity ... *Profitability
10 terms
Accounting Ratios
Current Ratio
Quick Ratio
Working Capital
Accounts Receivable Turnover
CA/CL
Cash+AR/CL
CA-CL
Sales/Average AR
Current Ratio
CA/CL
Quick Ratio
Cash+AR/CL
14 terms
Accounting Ratios
Working capital
Current ratio
Free cash flow
Debt to assets ratio
Current Assets minus Current Liabilities
Current Assets divided by Current Liabilities
Net cash provided by operating activities - cash used for cap…
total liabilities / total assets
Working capital
Current Assets minus Current Liabilities
Current ratio
Current Assets divided by Current Liabilities
37 terms
Accounting Ratios
Earnings Per Share Ratio
Retained Earnings
Book Value
Debt to Equity Ratio
Net Income (less preferred dividends) ... ----------------------…
Beg RE + Net Income - Dividends
Liability - Unamoritized Discount
Total Liability ... ----------------------------------------... Tot…
Earnings Per Share Ratio
Net Income (less preferred dividends) ... ----------------------…
Retained Earnings
Beg RE + Net Income - Dividends
Accounting Ratios
Current Ratio
Quick Ratio
Net Working Capital Ratio
Profit Margin
Current Assets / Current Liabilities
(Cash + Short Term Securities + Accounts Receivable) / Curren…
(Current Assets - Current Liabilities) / Total Assets
Net Income / Revenue
Current Ratio
Current Assets / Current Liabilities
Quick Ratio
(Cash + Short Term Securities + Accounts Receivable) / Curren…
Accounting ratios
working capital
current ratio
quick ratio
collection period
measure of short-term debt paying ability
measures liquidity and short-term debt paying ability
measures immediate short-term liquidity
measures number of days that receivables are outstanding
working capital
measure of short-term debt paying ability
current ratio
measures liquidity and short-term debt paying ability
15 terms
Accounting Ratios
Gross profit
Operating Margin
Profit Margin
Current Ratio
gross profit/Net Sales
Operating Income/Net Sales
Net income/Net sales
Current Assets/Current Liabilities
Gross profit
gross profit/Net Sales
Operating Margin
Operating Income/Net Sales
14 terms
Accounting Ratios
profit margin
gross profit percentage
current ratio
quick ratio
net income/net sales
gross profit/net sales
current assets/current liabilities
quick assets/current liabilities
profit margin
net income/net sales
gross profit percentage
gross profit/net sales
Accounting Ratios
Current Ratio
Debt to Assets Ratio
Acid-test Ratio
Receivable Turnover Ratio
Current Assets/Current Liabilities
Total Liabilities/Total Assets
(Cash+Net Receivables+Current Investments)/Current Liabilities)
Credit Sales/Average Net Receivables
Current Ratio
Current Assets/Current Liabilities
Debt to Assets Ratio
Total Liabilities/Total Assets
15 terms
Accounting Ratios
Return on Equity (ROE)
Dividend Payout
Return on Sales
Asset Turnover
Profitability Ratio. Measures the return to shareholders base…
Profitability Ratio. Measures the portion of firms profits pa…
Profitability Ratio. What is left of sales after all expenses…
Measures how much sales the firm generates for each dollar in…
Return on Equity (ROE)
Profitability Ratio. Measures the return to shareholders base…
Dividend Payout
Profitability Ratio. Measures the portion of firms profits pa…
20 terms
Accounting Ratios
Liquidity Ratios
Solvency Ratios
Profitability Ratios
Current Ratio
Measures short-term ability to pay obligations and meet unexp…
Measures ability to survive over a long period of time
Measures income or operating success for a given period of time
Current Assets/Current Liabilities ... -Indicated short-term deb…
Liquidity Ratios
Measures short-term ability to pay obligations and meet unexp…
Solvency Ratios
Measures ability to survive over a long period of time
30 terms
Accounting Ratios
Inventory Turnover
Days in inventory
Asset Turnover
Accounts Receivable Turnover
Cost of goods sold/Average Inventory... LIQUIDITY
365/Inventory Turnover... LIQUIDITY
Net Sales/Average total assets... PROFITABILITY
Net Credit Sales/Average net accounts receivable... LIQUIDITY
Inventory Turnover
Cost of goods sold/Average Inventory... LIQUIDITY
Days in inventory
365/Inventory Turnover... LIQUIDITY
Accounting Ratios
Gross Margin Percentage
Return On Sales Percentage (operating…
Net Margin
Operating Profit Margin vs. EBITDA Mar…
-Gross Margin Percentage=Gross Margin/Sales x 100. ... -Ex: Tai…
-Return on Sales vs. Gross Margin Percentage: Return on Sales…
Net Margin=Net Profit/Revenue ... >>>>>>> Net Profit=Revenues-C…
Operating Margin includes operating expenses such as deprecia…
Gross Margin Percentage
-Gross Margin Percentage=Gross Margin/Sales x 100. ... -Ex: Tai…
Return On Sales Percentage (operating…
-Return on Sales vs. Gross Margin Percentage: Return on Sales…
24 terms
Accounting Ratios
ROE
ROA
ROS
Debt to Equity
NI/ Average SE
[NI + IntExp(1-tax)]/Average Total Assets
[NI + IntExp(1-tax)]/Net Sales
Average Total Liability/ Average Se
ROE
NI/ Average SE
ROA
[NI + IntExp(1-tax)]/Average Total Assets
Accounting Ratios
Gross Profit Margin %
Profit Margin (Operating Profit) %
Return on Capital Employed (ROCE) %
Profit before Tax %
gross profit/revenue*100
operating profit/revenue*100
operating profit/(total assets-current liabilities)*100
profit before tax/revenue*100
Gross Profit Margin %
gross profit/revenue*100
Profit Margin (Operating Profit) %
operating profit/revenue*100
11 terms
Accounting ratios
Current
Acid test
Inventory turnover
Debt to equity
Current assets ÷ current liability
Quick assets÷current liability
Cost of goods sold ÷ average inventory
Total liability÷ total equity
Current
Current assets ÷ current liability
Acid test
Quick assets÷current liability
10 terms
Ratios accounting
Gross profit ratio
Net profit ratio
rate of stock turnover
Expenses ratio
Gross profit / turnover x 100
Net profit / turnover x 100
Cost of sales / average stock
Expenses / turnover x 100
Gross profit ratio
Gross profit / turnover x 100
Net profit ratio
Net profit / turnover x 100
21 terms
Accounting ratios
Profit margin
Asset turnover
Return on assets
Cash flow yield
Net income/net revenue
Net rev/avg total assets
Net income/avg total assets
Net cash flows from operating activities/net income
Profit margin
Net income/net revenue
Asset turnover
Net rev/avg total assets
19 terms
Accounting Ratios
ROCE
Gross Profit Mark-up
Gross Profit Margin
Current Ratio
(Profit before Interest & Tax÷Capital Employed) × 100
(Gross Profit÷ Cost of Sales) ×100
(Gross Profit÷Sales) × 100
Current Assets÷Current Liabilities
ROCE
(Profit before Interest & Tax÷Capital Employed) × 100
Gross Profit Mark-up
(Gross Profit÷ Cost of Sales) ×100
Accounting Ratios
Current Ratio
Acid-Test Ratio
Accounts Receivable Turnover
Inventory Turnover
Current assets/ Current Liabilities... Short-Term Debt Paying a…
Cash+Short-term investments + Current receivables/ Current Li…
Net Sales/Avg accounts receivable, net... Efficiency of collect…
Cost of Goods sold/ Avg Inventory... Efficiency of inventory ma…
Current Ratio
Current assets/ Current Liabilities... Short-Term Debt Paying a…
Acid-Test Ratio
Cash+Short-term investments + Current receivables/ Current Li…
18 terms
Accounting Ratios
Profitability
Managerial Effectiveness
Financial Stability
Cash Flow
%Gross Profit... %Net Profit... %Return on Equity... %Return on Assets
(Days)Turnover of Inventories Rate... (Days)Turnover of A/c Rece…
_:1 Current... _:1 Quick... %Debt... %Equity
%Cash Flow to Revenue... %Cash Flow Adequacy... (Times)Long-term De…
Profitability
%Gross Profit... %Net Profit... %Return on Equity... %Return on Assets
Managerial Effectiveness
(Days)Turnover of Inventories Rate... (Days)Turnover of A/c Rece…
37 terms
accounting ratios
working capital
current ratio
inventory turnover
days in inventory
=current assets - current liabilities... liquidity ratio
=current assets/ current liabilities... liquidity ratio... 1.25: co…
=cost of goods sold/ average inventory... liquidity ratio... 8: com…
=365 days/ inventory turnover... liquidity ratio... 46: company tak…
working capital
=current assets - current liabilities... liquidity ratio
current ratio
=current assets/ current liabilities... liquidity ratio... 1.25: co…
12 terms
Accounting Ratios
Current Ratio
Accounts Receivable Turnover
Average Collection Period
Inventory Turnover
Current Assets... -----------------------... Current Liabilities
net credit sales ---------------average accounts receivable
365 days... ---------------... Accounts Receivable Turnover
Cost of Goods Sold... ----------------------------... Average Inven…
Current Ratio
Current Assets... -----------------------... Current Liabilities
Accounts Receivable Turnover
net credit sales ---------------average accounts receivable
1 of 10