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Accoutning
Ratios
19
Accounting
05/05/2006
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Term
Current Ratio
 Definition
Current assets / current liabilities = to 1
Term
Quick ratio or acid test ratio
 Definition
Cash + marketable securities + net recievables / current liabilities = to 1
Term
Receivables turnover
 Definition
Net sales / average net receivables = times
Also # of days: 365 / times (Answer)
Term
Inventory turnover
 Definition
Cost of Goods Sold / average inventory = times
# of days: 365 / times (answer)
Term
asset turnover
 Definition
net sales / average total assets
Term
profit margin on sales
 Definition
net income / net sales
Term
rate of return on assets
 Definition
net income / average total assets
Term
earnings per share
 Definition
net income - preferred stock dividneds / average common stockholders equity
Term
working capital
 Definition
current assets - current liabilities
Term
price earnings ratio
 Definition
market price / earnings per share = times
Term
Dividends per share
 Definition
Dividneds / # of shares
Term
three designations of stock
 Definition
Authorized, Issued, and Outstanding
Term
Authorized
 Definition
Permission
Term
Issued
 Definition
total sold
Term
Outstanding
 Definition
Still outstanding (total sold - Treasury stock)
Term
Dividends we owe
 Definition
Dividends in arears
Term
Dividends become
 Definition
Cash dividends payable
Term
stock dividends (large)
 Definition
Par
Term
Stock dividends (small)
 Definition
FMV