Shared Flashcard Set

Details

Week 3
Use of Financial Info
16
Accounting
Undergraduate 4
10/16/2013

Additional Accounting Flashcards

 


 

Cards

Term
Intracompany Comparison
Definition
- analysing company's financial info in life of performance in prior period to reveal trends
Term
Intercompany Comparison
Definition
- analyzing current financial info against similar data from other companies
Term
Common-size Analysis
Definition

-compute % amounts of each item on f/s relative to base amount

- on a B/S (% of assets): vertical B/S

- I/S (% of revenues): vertical I/S

- facilitates ID of trends/changes in relationships between items

Term
Rate of Change Analysis
Definition

-% rate change in a company's financial position/perf.over time


-each line item expressed as % rate of change from base prd- horizontal statement

- can't be used if base is zero or(-)

Term
Liquidity
Definition

-how efficient can meet current obligations

-current: CA/CL

-quick = CA – Inventories)/CL

OR

(Cash + Marketable Securities + Accounts Receivable) / CL

Cash: (Cash + Marketable Securities) / CL
Term
Solvency
Definition

- meet long term debt payments ie int coverage, fin. leverage

- interest coverage: operating income/ int expense

-financial leverage: assets/equity

Term
Profitability
Definition

- margins

- Gross margin: gross profit/revenues

- profit margins: NI/Revenues

Term
Gross Profit
Definition
the net sales minus the cost of goods and services sold
Term
Efficiency
Definition

-how efficiently a company is using its assets ie ROE, ROA, asset turnover, inventory turnover, A/R turnover

 

Term
ROE
Definition
NI/ AVG Total Equity
Term
ROA
Definition
NI/AVG Total Assets
Term
Asset Turnover
Definition
Revenues/AVG Total Assets
Term
Inventory Turnover (days)
Definition
Inventory/(COGS/365))
Term
A/R Turnover (days)
Definition
A/R/ [revenues/(365)]
Supporting users have an ad free experience!