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Study sets matching "final exam financial statement analysis ratios"

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Study sets matching "final exam financial statement analysis ratios"

21 terms
Financial statement analysis ratios
Current ratio
Acid-test ratio
Accounts receivables turnover
Inventory turnover
Current assets/ current liabilities
Cash+ Short-term investments+current receivables/ current lia…
Net sales/ Average accounts receivable, net
Costs of goods sold/ Average inventory
Current ratio
Current assets/ current liabilities
Acid-test ratio
Cash+ Short-term investments+current receivables/ current lia…
32 terms
Financial Statement Analysis Ratios
Current Ratio
Quick Ratio
Cash Flow Liquidity
Accounts Receivable Turnover
Current Assets/Current Liabilities
(Cash+Short-Term Investments + Accounts Receivable)/Current L…
(Cash+Short-Term Investments+Cash Flow from Operations)/Curre…
Net Sales/Average Accounts Receivable
Current Ratio
Current Assets/Current Liabilities
Quick Ratio
(Cash+Short-Term Investments + Accounts Receivable)/Current L…
32 terms
Financial statement analysis and ratios
Two phases of financial statement anal…
Computation phase
Vertical analysis on the balance sheet
Horizontal analysis
Computation and interpretation
Vertical analysis horizontal n ratio analysis
On the balance sheet everything is recorded as a percentage o…
Percentage change for individual items on the financial state…
Two phases of financial statement anal…
Computation and interpretation
Computation phase
Vertical analysis horizontal n ratio analysis
17 terms
Financial Statement Analysis/Ratios
Profitablity Ratios
liquidity ratios
Total Asset Turnover Ratio (Efficiency…
Inventory Turnover Ratio (Efficiency R…
gross operating net profit
current quick
Sales (Revenues) / Total Assets... Efficiency with which a comp…
Costs of Goods sold/ inventory
Profitablity Ratios
gross operating net profit
liquidity ratios
current quick
28 terms
Financial statement analysis ratios
Profit margin
ROA
ROE
Current ratio
NI/Sales
NI/TA
NI/OE
CA/CL
Profit margin
NI/Sales
ROA
NI/TA
Financial Statement Analysis Ratios
Working Capital
Current Ratio
Inventory Turnover
Days Supply of Inventory
Current Assets - Current Liabilities
Current Assets/Current Liabilities
Cost of Goods Sold/Inventories
365/Inventory Turnover
Working Capital
Current Assets - Current Liabilities
Current Ratio
Current Assets/Current Liabilities
14 terms
Financial Statement Analysis Ratios
Current Ratio
Acid-test Ratio
quick assets
Accounts Receivable Turnover Ratio
current assets divided by current liabilities
quick assets divided by current liabilities
cash, short-term investments, accounts receivable
net sales divided by average accounts receivable
Current Ratio
current assets divided by current liabilities
Acid-test Ratio
quick assets divided by current liabilities
13 terms
Financial statement Analysis ratios
Current ratio
Acid-test (quick) ratio
Accounts receivable turnover
Inventory turnover
Current assets/ current liabilities, measures short term debt…
Investments+AR(net)/ Current Liabilities, measures immediate…
net credit sales/ average net AR, measures liquidity of AR
COGS/ avg inventory, measures liquidity of inventory
Current ratio
Current assets/ current liabilities, measures short term debt…
Acid-test (quick) ratio
Investments+AR(net)/ Current Liabilities, measures immediate…
32 terms
Financial Statement Analysis Ratios
Current Ratio
Quick Ratio
Cash Flow Liquidity
Accounts Receivable Turnover
Current Assets/Current Liabilities
(Cash+Short-Term Investments + Accounts Receivable)/Current L…
(Cash+Short-Term Investments+Cash Flow from Operations)/Curre…
Net Sales/Average Accounts Receivable
Current Ratio
Current Assets/Current Liabilities
Quick Ratio
(Cash+Short-Term Investments + Accounts Receivable)/Current L…
19 terms
Financial Statement Analysis Ratios
Current Ratio
Acid-Test Ratio
Accounts Receivable Turnover
Inventory Turnover
Current Assets / Current Liabilities
Cash + Short-term Investments + Current Receivables / Current…
Net Sales / Avg Accounts Receivable, net
Cost of Goods Sold / Avg Inventory
Current Ratio
Current Assets / Current Liabilities
Acid-Test Ratio
Cash + Short-term Investments + Current Receivables / Current…
19 terms
Financial Statement Analysis ratios
Current Ratio
Acid-test Ratio
A/r turnover
Inventory Turnover
Current Assets/current Liabilities
(Cash+Short-term investments+Current Receivables)/Current Lia…
Net Sales/Avg A/R
COGS/Avg Inventory
Current Ratio
Current Assets/current Liabilities
Acid-test Ratio
(Cash+Short-term investments+Current Receivables)/Current Lia…
18 terms
Financial Statement Analysis Ratios
Measures of Liquidity (1)
Measures of Leverage (2)
Measures of Management (4)
Measures of Profitability (5)
Current Ratio
Debt Ratio, Debt to Equity Ratio
A/R Turnover, Days Sales in A/R, Inventory Turnover, Days Sal…
Earnings Per Share (EPS), Book Value per Share, Price-Earning…
Measures of Liquidity (1)
Current Ratio
Measures of Leverage (2)
Debt Ratio, Debt to Equity Ratio
29 terms
Financial Statement Analysis Ratios
Liquidity Ratios
Activity Ratios
Profitability Ratios
Coverage Ratios
current ratio, quick (acid test) ratio, current cash debt cov…
receivables, inventory, and asset turnover
profit margin on sales, rate of return on assets, rate of ret…
debt to total assets, times interest earned, cash debt covera…
Liquidity Ratios
current ratio, quick (acid test) ratio, current cash debt cov…
Activity Ratios
receivables, inventory, and asset turnover
19 terms
Financial Statement Analysis Ratios
Current Ratio
Acid-Test Ratio
Accounts Receivable Turnover
Inventory Turnover
Current Assets / Current Liabilities
Cash + Short-Term Investments + Current Receivables / Current…
Net Sales / Average Accounts Receivable, net
Cost of Goods Sold / Average Inventory
Current Ratio
Current Assets / Current Liabilities
Acid-Test Ratio
Cash + Short-Term Investments + Current Receivables / Current…
17 terms
Financial Statement Analysis Ratios
Current ratio
Acid test ratio
A/R turnover
Inventory Turnover
Current assets/current liabilities
(Cash+short term investments+current receivables)/current lia…
Net sales/avg accounts receivables
COGS/Avg inventory
Current ratio
Current assets/current liabilities
Acid test ratio
(Cash+short term investments+current receivables)/current lia…
32 terms
Financial Statement Analysis Ratios
Current Ratio
Quick Ratio
Cash Flow Liquidity
Accounts Receivable Turnover
Current Assets/Current Liabilities
(Cash+Short-Term Investments + Accounts Receivable)/Current L…
(Cash+Short-Term Investments+Cash Flow from Operations)/Curre…
Net Sales/Average Accounts Receivable
Current Ratio
Current Assets/Current Liabilities
Quick Ratio
(Cash+Short-Term Investments + Accounts Receivable)/Current L…
14 terms
Financial Statement and Analysis Ratios
Net PBIT Margin
ROCE
Net Asset Turnover
Gross Profit Margin
PBIT/Sales * 100
PBIT/Equity + Long Term Liabilities * 100
Sales/ Capital Employed * 100
Gross Profit/Sales * 100
Net PBIT Margin
PBIT/Sales * 100
ROCE
PBIT/Equity + Long Term Liabilities * 100
10 terms
Financial Statement Analysis Ratios
Gross profit ratio?
Net profit ratio?
Return on equity ratio?
Inventory turnover ratio?
Evaluates the trading profitability of the organisation
Measures the net profit generated from sales revenue
Measures a firm's profitability in terms of the return being…
This measures the number of times that an organisation has be…
Gross profit ratio?
Evaluates the trading profitability of the organisation
Net profit ratio?
Measures the net profit generated from sales revenue
20 terms
Ratios in Financial Statement Analysis
Working capital
Current Ratio
Cash Ratio
Acid test Ratio (Quick Test)
Current Assets - Current liabilities ... Evaluating the ability…
Total Current Assets / Total Current Liabilities ... Evaluating…
Cash + Cash Equivalents ... Evaluating the ability to pay curren…
Cash including cash equivalents + Short Term Investments + Ne…
Working capital
Current Assets - Current liabilities ... Evaluating the ability…
Current Ratio
Total Current Assets / Total Current Liabilities ... Evaluating…
6 terms
Financial statement analysis: Financial ratios
Financial ratios provide a profile of…
financial ratios allow a comparison of…
financial ratios are ............ meas…
financial ratios eliminate differences…
1. Trends/levels... 2. economic characteristics ... 3. competitive…
risk and return
relative
scale
Financial ratios provide a profile of…
1. Trends/levels... 2. economic characteristics ... 3. competitive…
financial ratios allow a comparison of…
risk and return
Financial Statement Analysis ratio
Current ratio
Quick ratio
Working capital to total assets
Working capital
TCA/TCL
(Cash+Marketable Securities+AR) / TCL
Working Capital / TA
CA-CL
Current ratio
TCA/TCL
Quick ratio
(Cash+Marketable Securities+AR) / TCL
45 terms
Financial Statement Analysis ratio
Current ratio
Quick ratio
Working capital to total assets
Working capital
TCA/TCL
(Cash+Marketable Securities+AR) / TCL
Working Capital / TA
CA-CL
Current ratio
TCA/TCL
Quick ratio
(Cash+Marketable Securities+AR) / TCL
21 terms
Analysis of Financial Statements (Ratios)
What are the 4 Building Blocks of Anal…
What is liquidity and efficiency?
What is solvency?
What is Profitability?
Liquidity and Efficiency, Solvency, Profitability, and Market…
the ability to meet short term obligations and efficiently ge…
the ability to generate future revenues and meet long term ob…
The ability to provide financial rewards sufficient to attrac…
What are the 4 Building Blocks of Anal…
Liquidity and Efficiency, Solvency, Profitability, and Market…
What is liquidity and efficiency?
the ability to meet short term obligations and efficiently ge…
292 terms
"Financial Statement and Ratio Analysis
Flexible Budget (definition)
Name two ways a Flexible Budget is used
A Static Budget is also known as a
Static Budget (definition)
A budget that changes with volume levels. It shows expected r…
1. Used as a tool to evaluate performance... 2. Provides "What I…
Master Budget
A budget based solely on the planned volume of activity
Flexible Budget (definition)
A budget that changes with volume levels. It shows expected r…
Name two ways a Flexible Budget is used
1. Used as a tool to evaluate performance... 2. Provides "What I…
32 terms
Financial Statements and Ratio Analysis
Purpose of Financial Statements
Types of Information in Financial Stat…
Balance Sheet... a.k.a Statement of Finan…
Income Statement ... a.k.a Profit and Los…
Communicate financial information to decision makers
Balance Sheet... Income Statement... Cash Flow Statement
Reports the financial status of the firm at a single point in…
Reports the net income for the firm over a specific period of…
Purpose of Financial Statements
Communicate financial information to decision makers
Types of Information in Financial Stat…
Balance Sheet... Income Statement... Cash Flow Statement
32 terms
Financial Statements and Ratio Analysis
Income Statement
Balance Sheet
Stockholder's Report
Statement of Cashflow
Provides a financial summary of a company's operating results…
Presents a summary of a firm's financial position at a given…
Summarizes and documents the firms financial activities durin…
Provides a summary of the firms operating, investment, and fi…
Income Statement
Provides a financial summary of a company's operating results…
Balance Sheet
Presents a summary of a firm's financial position at a given…
30 terms
Financial Statements and Ratio Analysis
Balance sheet
Income statement
Cash flow statement
Types of expenses
Aka: statement of financial position... Current financial positi…
Aka: profit and loss statement... Past financial position of the…
Projected and realized inflow and outflow of cash (over a per…
1) COGS... 2) operating expenses
Balance sheet
Aka: statement of financial position... Current financial positi…
Income statement
Aka: profit and loss statement... Past financial position of the…
40 terms
Financial Statements & Ratio Analysis
Types of Information in ... Financial Sta…
Balance Sheet... (aka...Statement of Fina…
Income Statement... (aka...Profit & Loss…
Cash Flow Statement
1) Balance Sheet... 2) Income Statement... 3) Cash Flow Statement
~Current financial position of the firm... ~as of a set date, e.…
~Past financial performance of the firm... ~over a period of tim…
~Projected and realized inflow and outflow of cash... ~over a pe…
Types of Information in ... Financial Sta…
1) Balance Sheet... 2) Income Statement... 3) Cash Flow Statement
Balance Sheet... (aka...Statement of Fina…
~Current financial position of the firm... ~as of a set date, e.…
33 terms
Financial Statements Analysis (Ratio Analysis)
What's the formula for an Income State…
What's the formula for Gross Profit?
What's the formula for EBIT?
What's the Formula for EBT
Revenue less Expenses = Net Income
Net Income less Sales and COGS
Gross Profit less Operation Expenses and Depreciation
EBIT less Interest Expenses
What's the formula for an Income State…
Revenue less Expenses = Net Income
What's the formula for Gross Profit?
Net Income less Sales and COGS
13 terms
Financial statement analysis: profitability ratios
what is the ratio formula for the retu…
what is the ratio formula for return o…
what is the ratio formula for operatin…
what is the ratio formula for gross pr…
(profit after tax for the year / share capital + reserves ) x…
(operating profit / share capital + reserves + long-term liab…
(operating profit / sales revenue) x 100
(gross profit / sales revenue) x 100
what is the ratio formula for the retu…
(profit after tax for the year / share capital + reserves ) x…
what is the ratio formula for return o…
(operating profit / share capital + reserves + long-term liab…
8 terms
Financial statement analysis: classification of ratios
what are the 5 main categories of rati…
what are profitability ratios?
what are efficiency ratios?
what are liquidity ratios?
1. profitability ratios ... 2. Liquidity ratios... 3. Investment ra…
- provide an insight to degree of success in creating profit…
measure the efficiency to which resources have been used.
assess the ability to meet obligations (liabilities) as they…
what are the 5 main categories of rati…
1. profitability ratios ... 2. Liquidity ratios... 3. Investment ra…
what are profitability ratios?
- provide an insight to degree of success in creating profit…
15 terms
Ratios used for financial statement analysis
Net profit margin
Gross profit percentage
Return on total assets
Return on investments
(Net income / net revenue) X 100
(Net sales revenue - cost of goods sold) / net sales revenue
Net income / average total assets
Income / investment
Net profit margin
(Net income / net revenue) X 100
Gross profit percentage
(Net sales revenue - cost of goods sold) / net sales revenue
10 terms
Ratios used in financial statement analysis
Net Profit Margin
Gross Profit Percentage
Asset Turnover
Receivables Turnover
(Net Income/ Total Rev) X 100
(Net Sales Rev - COGS / Net Sales Rev ) X 100
Total Revenue / Avg. Total Assets
Net Sales Rev / Avg Net Receivables (Accts rec - allowance fo…
Net Profit Margin
(Net Income/ Total Rev) X 100
Gross Profit Percentage
(Net Sales Rev - COGS / Net Sales Rev ) X 100
23 terms
Accounting financial statement ratio analysis
Working capital
current ratio
Quick ratio
Inventory turnover
Measures ability to pay current liabilities with current assets
Measures ability to pay current liabilities with current asse…
Shows ability to pay all current liabilities if they come due…
Measures number of times a company sells its average level of…
Working capital
Measures ability to pay current liabilities with current assets
current ratio
Measures ability to pay current liabilities with current asse…
62 terms
Accounting, Financial Statements, and Ratio Analysis
Purpose of Financial Statement:... Intern…
What is the purpose to internal financ…
Purpose of Financial Statement:... Extern…
What is the purpose to external financ…
Managerial Accounting
to help business wonders and managers make decisions. It is a…
Financial Accounting
To enable other parties to determine the value, creditworthin…
Purpose of Financial Statement:... Intern…
Managerial Accounting
What is the purpose to internal financ…
to help business wonders and managers make decisions. It is a…
23 terms
Finance 110- Analysis of financial Statement and Ratio analysis
ratio
Cross-Sectional Analysis
Time-Series Analysis
Combined Analysis
combination of selected items from the financial statements o…
comparing the ratios of different... firms as of the same point…
comparison of a firm's ratio to its own previous ratios... Firm…
combination of cross-sectional and time-series analysis using…
ratio
combination of selected items from the financial statements o…
Cross-Sectional Analysis
comparing the ratios of different... firms as of the same point…
17 terms
Chapter 15 - Financial Statement Analysis (Ratios)
Inventory Turnover
Days' Sales in Inventory
Gross Profit Percentage
Accounts Receivable Turnover
Cost of Goods Sold / Average Merchandise Inventory
365 days / Inventory Turnover
Gross profit / Net sales revenue
Net Credit Sales / Average net accounts receivable
Inventory Turnover
Cost of Goods Sold / Average Merchandise Inventory
Days' Sales in Inventory
365 days / Inventory Turnover
9 terms
Chapter 15 Financial Statement Analysis Ratios
Acid-Test Ratio... (Quick Ratio)
Average Collection Period
Inventory Turnover
Times Interest Earned
(Cash+Marketable Securities+Current Receivables)/Current Liab…
365/Accounts Receivable Turnover... Short-Term Creditors
Cost of Goods Sold/Average Inventory... Short-Term Creditors
EBIT/Interest Expense... Long-Term Creditors
Acid-Test Ratio... (Quick Ratio)
(Cash+Marketable Securities+Current Receivables)/Current Liab…
Average Collection Period
365/Accounts Receivable Turnover... Short-Term Creditors
20 terms
BU2123-Financial Statement Analysis Ratio
Current Ratio
Acid-Test Ratio
Accounts Receivable Turnover
Days' Sales in Receivables
Short-term debt paying ability
Immediate short-term debt paying ability
Liquidity and efficiency of collection
Liquidity of receivables
Current Ratio
Short-term debt paying ability
Acid-Test Ratio
Immediate short-term debt paying ability
18 terms
Managerial Accounting-Financial Statement Analysis Ratios
current ratio
Acid-test ratio (Quick ratio)
Accounts Receivable Turnover
Inventory Turnover
Current Assets/Current Liabilities -short term debt-paying ab…
Cash+Short Term Investments+Current Rec/Current Liabilities -…
Net Sales/ Average Accounts Receivable, net - How frequently…
Cost of Goods Sold/Average Inventory - how long a company hol…
current ratio
Current Assets/Current Liabilities -short term debt-paying ab…
Acid-test ratio (Quick ratio)
Cash+Short Term Investments+Current Rec/Current Liabilities -…
13 terms
Accounting Principles Financial Statement Analysis Ratios
Current Ratio
Acid- Test Ratio
Receivables Turnover
Inventory Turnover
Current assets... ___________... Current Liabilities... Propotion of…
Cash+Short-term investments+ Receivables (net)... ______________…
Net Credit Sales... _____________... Average net receivables... The n…
CGS... _____________... Average Inventory... The number of times on a…
Current Ratio
Current assets... ___________... Current Liabilities... Propotion of…
Acid- Test Ratio
Cash+Short-term investments+ Receivables (net)... ______________…
26 terms
HCAD 375- Financial Statement Analysis (Ratios)
What kinds of questions do Financial S…
Horizontal analysis (what looks at/ wh…
Trend Analysis (What looks at/What tel…
Why use Trend analysis over Horizontal…
- Is the organization profitable? Why or Why not?... - how effec…
What looks at: looks at the percentage change in a line item…
- compares change over a longer period of time by comparing e…
Trend analysis is based on the idea that what has happened in…
What kinds of questions do Financial S…
- Is the organization profitable? Why or Why not?... - how effec…
Horizontal analysis (what looks at/ wh…
What looks at: looks at the percentage change in a line item…
8 terms
BUSI 305 Financial Statement Analysis Ratios
Current Ratio
Quick Ratio
Operating-cash-flow-to-current liabili…
Inventory turnover
Current Assets/Current Liabilities
(Cash+Securities+A/R)/Current Liabilities
Operating Cash Flows/Avg. Liabilities
Cost of Goods Sold/Avg. Inventory
Current Ratio
Current Assets/Current Liabilities
Quick Ratio
(Cash+Securities+A/R)/Current Liabilities
13 terms
Common Ratios Used in Financial Statement Analysis
Net Profit Margin
Gross Profit Percentage
Asset Turnover
Fixed Asset Turnover
Net Income... _______________ X 100 ... Total Revenue (Profitabili…
Net Sales Revenue- Cost of Goods Sold... _______________________…
Total Revenue... _________________... Average Total Assets (profit)
Total Revenue... ________________... Average Net fixed Assets (Pro…
Net Profit Margin
Net Income... _______________ X 100 ... Total Revenue (Profitabili…
Gross Profit Percentage
Net Sales Revenue- Cost of Goods Sold... _______________________…
34 terms
Competency 1: Financial Statement Analysis ~ Ratios & Formulas
ROE... Return On Equity =
ROE... Return On Equity (DuPont) =
NPM... Net Profit Margin =
AT... Asset Turnover =
Net Income / Equity
Net Profit Margin x Asset Turnover x Leverage Multiplier
Net Income / Sales
Sales / Assets
ROE... Return On Equity =
Net Income / Equity
ROE... Return On Equity (DuPont) =
Net Profit Margin x Asset Turnover x Leverage Multiplier
39 terms
Chapter 11: Financial Statements and Ratio Analysis
Income Statement
Earnings per share (EPS)
Dividend per Share (DPS)
Balance Sheet
1) Sales Revenue: total dollar amount of sales during the per…
earnings available for common stockholders/# of shares outsta…
which is the dollar amount of cash distributed during the per…
1) Marketable Securities: very liquid short-term investments…
Income Statement
1) Sales Revenue: total dollar amount of sales during the per…
Earnings per share (EPS)
earnings available for common stockholders/# of shares outsta…
5 terms
Financial statement analysis: Efficiency ratios (not finished)
What are the main efficiency ratios? (5)
what is the formula for average invent…
what is the formula for average settle…
what is the formula for sales revenue…
1. Average inventories turnover period... 2. average settlement…
average inventories held / cost of sales x 365
(trade receivables / credit sales) x 365
(sales revenue / share capital + reserves + non-current liabi…
What are the main efficiency ratios? (5)
1. Average inventories turnover period... 2. average settlement…
what is the formula for average invent…
average inventories held / cost of sales x 365
33 terms
chapter 13: analyzing financial statements (ratio analysis)
factors influencing compony's potentia…
business strategy
DuPont model
product differentiation
economy-wide factors-overall health of economy (unemployment…
...
analyze the profitability of a business (idk if we need to kn…
companies offer products with unique benefits e.g. high quali…
factors influencing compony's potentia…
economy-wide factors-overall health of economy (unemployment…
business strategy
...
17 terms
Financial Statements and Analysis: Best to handwrite to practice ratios!
Purposes of Financial Statement Analysis
Users
Numbers Need Context
Issues with Peer Firms/Industries
-Examine data for obvious trends and patterns... -Attempts to il…
*Internal users-Part of SWOT analysis... *Lenders- lenders look…
Context can be:... How the numbers changed over time... Numbers in…
Some firms are very diverse. Walmart sells mostly groceries b…
Purposes of Financial Statement Analysis
-Examine data for obvious trends and patterns... -Attempts to il…
Users
*Internal users-Part of SWOT analysis... *Lenders- lenders look…
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