Term
| Accounts receivable turnover ratio |
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Definition
| Indicates how rapidly the firm is collecting its credit, as measured by the number of times its accounts receivable are collected or "rolled over" during the year. |
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Definition
| Indicates a firm's liquidity, as measured by its liquid assets, excluding inventories, relative to its current liabilities. |
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Term
| Average collection period |
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Definition
| Indicates how rapidly a firm is collecting its credit, as measured by the average number of days it takes to collect its accounts receivable. |
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Term
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Definition
| Indicates a firm's liquidity, as measured by its liquid assets (current assets) relative to its liquid debt (short-term or current liabilities). |
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Term
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Definition
| Indicates how much debt is used to finance a firm's assets. |
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Term
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Definition
| An approach to evaluate a firm's profitability and return equity. |
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Term
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Definition
| Restating the accounting data in relative terms to identify some of the financial strengths and weaknesses of a company. |
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Term
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Definition
| Indicates the relative liquidity of inventories, as measured by the number of times a firm's inventories are replaced during the year. |
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Term
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Definition
| Measures the net income of a firm as a percent of sales. |
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Term
| Operating income return on investment |
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Definition
| Indicates the effectiveness of management at generating operating profits on the firm's assets, as measured by operating profits relative to the total assets. |
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Term
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Definition
| Indicates management's effectiveness in managing the firm's income statement, as measured by operating profits relative to sales. |
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Term
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Definition
| Determines the amount of net income produced on a firm's assets by relating net income to total assets. |
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Term
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Definition
| Indicates the accounting rate of return on the stockholder's investment, as measured by net income relative to common equity. |
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Term
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Definition
| Times interest earned indicates a firm's ability to cover its interest expense, as measured by its earning before interest and taxes relative to the interest expense. |
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Term
| Total asset turnover rate |
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Definition
| Indicates management's effectiveness at managing a firm's balance sheet--its assets--as indicated by the amount of sales generated per one dollar of assets. |
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