Term
| Accounts receivable turnover |
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Definition
| Measures how frequently during the year the accounts receivable are being converted to cash by dividing net sales by the average net accounts receivable. |
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Term
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Definition
| A financial statement in which all items are expressed in percentages. |
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Term
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Definition
| The ratio of current assets to current liabilities. |
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Term
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Definition
| A profitability measure that is computed by dividing the annual dividends paid per share of common stock by the market price per share on a specific date. |
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Term
| Earnings per share (EPS) on common stock |
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Definition
| A measure of profitability computed by dividing net income, reduced by preferred dividends, by the number of common shares outstanding. |
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Term
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Definition
| A method of analyzing financial performance that computes the percentage of increases and decreases in related items in comparative financial statements. |
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Term
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Definition
| Measures the relationship between the volume of goods (merchandise) sold and the amount of inventory carried during the period. |
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Term
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Definition
| The tendency of the rate earned on stockholders’ equity to vary from the rate earned on total assets because the amount earned on assets acquired through the use of funds provided by creditors varies from the interest paid to these creditors. |
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Term
| Management Discussion and Analysis (MDA) |
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Definition
| An annual report disclosure that provides management’s analysis of the results of operations and financial condition. |
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Term
| Number of days’ sales in inventory |
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Definition
| The relationship between the volume of sales and inventory, computed by dividing the inventory at the end of the year by the average daily cost of goods sold. |
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Term
| Number of days’ sales in receivables |
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Definition
| The relationship between sales and accounts receivable, computed by dividing the net accounts receivable at the end of the year by the average daily sales. |
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Term
| Number of times interest charges are earned |
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Definition
| A ratio that measures the risk that interest payments to debt holders will continue to be made if earnings decrease. |
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Term
| Price-earnings (P/E) ratio |
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Definition
| The ratio of the market price per share of common stock at a specific date to the annual earnings per share. |
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Term
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Definition
| The ability of a firm to earn income. |
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Term
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Definition
| The sum of cash, receivables, and marketable securities. |
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Term
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Definition
| A financial ratio that measures the ability to pay current liabilities with quick assets (cash, marketable securities, accounts receivable). |
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Term
| Rate earned on common stockholders’ equity |
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Definition
| A measure of profitability computed by dividing net income, reduced by preferred dividend requirements, by common stockholders’ equity. |
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Term
| Rate earned on stockholders’ equity |
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Definition
| A measure of profitability computed by dividing net income by total stockholders’ equity. |
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Term
| Rate earned on total assets |
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Definition
| A measure of the profitability of assets without regard to the equity of creditors and stockholders in the assets. |
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Term
| Ratio of fixed assets to long-term liabilities |
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Definition
| A solvency measure that indicates the margin of safety of the noteholders or bondholders. |
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Term
| Ratio of liabilities to stockholders’ equity |
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Definition
| A solvency measure that indicates the margin of safety for creditors. |
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Term
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Definition
| The ability of a firm to pay its debts as they come due. |
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Term
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Definition
| A method of analyzing comparative financial statements in which percentages are computed for each item within a statement to a total within the statement. |
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