Shared Flashcard Set

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Accounting 230
Exam 3 Prep
28
Accounting
11/10/2006

Additional Accounting Flashcards

 


 

Cards

Term
Liquidity Ratios
Definition
Ability of the business to pay its bills as the come due
Term
Working Capital
Definition
Current Assests - Current Liabilities
Term
Current Ratio
Definition
Current Assets/Current Liabilities
Term
Current Cash Debt Coverage Ratio
Definition
Cash Provided by Operations/
Average Current Liabilities
Term
Inventory Turnover Ratio
Definition
Cost of Goods Sold/Average Inventory
Term
Days in Inventory
Definition
365 Days/Inventory Turnover Ratio
Term
Receivables Turnover Ratio
Definition
Net Credit Sales/
Average Net Receivables
Term
Average Collection Period
Definition
365 Days/Receivables Turnover Ratio
Term
Solvency Ratios
Definition
These ratios help determine whether a company can survive and thrive in a long-term scenario
Term
Debt to Total Assets
Definition
Total Liabilities/Total Assets
Term
Cash Debt Coverage Ratio
Definition
Cash Provided by Operations/
Average Total Liabilities
Term
Times Interest Earned
Definition
(Net Income+Interest Expense+Tax Expense)/
Interest Expense
Term
Free Cash Flow
Definition
Cash Provided by Operations-Capital Expenditures-Cash Dividends
Term
Earnings per Share
Definition
(Net Income-Preferred Stock Dividends)/
Average Shares of Common Stock Outstanding
Term
Price-Earning Ratio
Definition
Stock Price per Share/
Earnings per Share
Term
Gross Profit Rate
Definition
Gross Profit/Net Sales
Term
Profit Margin Ratio
Definition
Net Income/Net Sales
Term
Return on Total Assets
Definition
Net Income/Average Total Assets
Term
Asset Turnover
Definition
Net Sales/Average Total Assets
Term
Payout Ratio
Definition
Cash Dividends Declared for Common Stock/
Net Income
Term
Return on Common Stockholders' Equity
Definition
(Net Income-Preferred Dividends)/
Average Common Stockholders' Equity
Term
Net Realizable Value (NVR)
Definition
Accounts Receivable - Estimated Bad Debts
Term
Straight Line Depreciation
Definition
(Cost - Salvage)/Life in Years
Term
Units of Activity Depreciation
Definition
(Cost - Salvage)/Life in Units