SOLVENCY
Solvency ratios are used to assess a company for a short or long term period
What is long term?
Another name for activity ratios
What is "Efficiency Ratios"?
Name the liquidity ratios
What is current and acid-test ratios?
Number of ratios
What is four?
Number of solvency ratios
What is three?
Use of profitability ratios
What is assess a company's ability to earn/maximize profits from sales?
Ratio used to measure average length of time before a business is paid by its debtors
What is average receivables or collection period ratio?
Use of liquidity ratios
What is to measure a firm's short term obligations?
Another name for debt-to-equity ratio
What is gearing ratio
List the three solvency ratios
What is debt-to-total assets, debt-to-equity, and time-interest-earned?
Ratio which measures a company's ability to generate profit from its assets
What is Return on Assets (ROA)?
Name the activity ratio used to measure how efficiently a company manages its inventory and give its formula
What is inventory turnover?
Cost of Sales/ Average inventory
Another name for quick ratio
What is quick ratio?
Formula for net income percentage ratio
What is (Net Profit/ Total Revenue) x 100?
Use of solvency ratios
What is measure a company's financial health in relation to its debts and determine its long-term suistanability?
____ ratios are more favourable than ____ ratios, indicating a success at converting revenue into profit.
What is "Higher ratios are more favourable than lower ratios, indicating a success at converting revenue into profit?".
Measures how effective a business is at collecting debt and extending credit
What is Accounts Receivables Turnover Ratio?
Formula for the quick ratio
What is (Current Ratio - Inventory) / Current Liabilities
Dividend Payout is a part of which ratio
What is profitability ratio?
True or False
Solvency ratios reflect current market values rather than historical financial data.
What is "False"?
Solvency ratios reflect historical financial data rather than current market values .
Complete the Return on Capital Employed (ROCE) formula and state the use of this ratio.
(Net Income/ x ) multiplied by 100
What is x = capital employed (non-current liabilities + shareholder's equity) and assesses how efficiently a company generates profits from capital employed for operations?
Fill in the blanks
Activity ratio mesaures a company's e______, i____ management, collection of accounts r___ and payment of accounts p____.
What is Activity ratio mesaures a company's efficiency, inventory management, collection of accounts receivables and payment of accounts payable.
Three effects of weak liquidity ratios to a firm
What is lack of cash to pay dividends, expenses, or monetary obligations / bankruptcy/ insolvency/ lass of investor confidence?
When is Accounting Paper 2 exam
What is May 22?