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Financial Accounting
Econ 170
9
Accounting
Undergraduate 1
03/09/2013

Additional Accounting Flashcards

 


 

Cards

Term
Profitability ratios
Definition
indicate if an organization is making a satisfactory profit
Term
Leverage ratios
Definition
indicate if an organization is a good risk for a lender or investor
Term
Liquidity ratios
Definition
indicate if an organization can pay its bills
Term
Efficiency ratios
Definition
indicate if an organization is making the most of its assets
Term
Gross profit margin percentage
Definition
"gross margin"- reflects the basic profitability of products or services
Term
Operating profit margin percentage
Definition
"operating margin"- reflects a more comprehensive measure of a company's ability to generate profits
Term
Net profit margin percentage
Definition
"net margin"- reflects how much out of every sales dollar the company gets to keep after everything else has been paid for; people, vendors, lenders, government
Term
Return on assets (ROA)
Definition
reflects how effective the company is at using assets to generate profit
Term
Return on equity (ROE)
Definition
reflects what percentage of profit owners/shareholders make for every dollar of equity invested in the company
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