Shared Flashcard Set

Details

Financial Statement Analysis Ratios
As found on pg. 557 of "Financial Accounting Fundamentals"
19
Accounting
Undergraduate 2
03/13/2010

Additional Accounting Flashcards

 


 

Cards

Term
Current Ratio
Definition
current assets/current liabilities
Short term debt paying ability.
Term
Acid-test ratio
Definition
(cash + short term investments + current receivables)/current liabilities
Immediate short term debt paying ability.
Term
Accounts receivable turnover
Definition
net sales/average accounts receivable, net
Efficiency of collection.
Term
Inventory turnover
Definition
cost of goods sold/average inventory
Efficiency of inventory management.
Term
Days' sales uncollected
Definition
account receivables/net sales *365
Liquidity of receivables.
Term
Days' sales in inventory
Definition
ending inventory/cost of goods sold *365
Liquidity of inventory.
Term
Total asset turnover
Definition
net sales/average total assets
Efficiency of assets in producing sales.
Term
Debt ratio
Definition
total liabilities/total assets
Creditor financing and leverage.
Term
Equity ratio
Definition
total equity/total assets
Owner financing
Term
Debt to equity ratio
Definition
total liabilities/total equity
Debt versus equity financing.
Term
Times interest earned
Definition
income before interest expense and income taxes/interest expense
Protection in meeting interest payments.
Term
Profit margin ratio
Definition
net income/net sales
Net income per sales dollar.
Term
Gross margin ratio
Definition
(net sales - cost of goods sold)/net sales
Gross margin per sales dollar.
Term
Return on total assets
Definition
net income/average total assets
Overall profitability of assets.
Term
Return on common stockholder's equity
Definition
(net income-preferred dividends)/average common stockholder's equity
Profitability of owner investment.
Term
Book value per common share
Definition
shareholder's equity applicable to common shares/number of common shares outstanding
Liquidation at reported amounts.
Term
Basic earnings per share
Definition
(net income - preferred dividends)/weighted average common shares outstanding
Net income per common share.
Term
Price earnings ratio
Definition
market price per common share/earnings per share
Market value relative to earnings.
Term
Dividend yield
Definition
annual cash dividends per share/market price per share
Cash return per common share.
Supporting users have an ad free experience!