Statements Matter
These stakeholders make care about Financial Statements published by a business. (list 3)
Who are, employees, investors, managers, governments, suppliers, etc
P/E Ratio, Dividend Yield, Earnings Per Share are these types of ratios.
What are investor ratios?
The easiest way to improve me is to make mores sales while paying suppliers more slowly
What is the Current Ratio
"Net Cash Flow.... i.e. the total value of all cash flows from investment should be all that matters"
True or False
What is false?
Statement of Financial Position (Includes long term assets and liabilities)
What is a Balance Sheet?
It measures success in turning assets to cash to pay debts
What are Liquidity Ratios?
I'm simple, lower your cost and increase your revenue and I'll get better
What is Gross Profit Margin
Initial Investment = 50,000
Year 1 Revenue = 25,000
Year 2 Revenue = 20,000
Year 3 Revenue = 15,000
Payback Period = ???
What is 2 years and 4 months
Statement of Revenues & Expenses. Also referred to as the statement of Profit and Loss.
What is an Income Statement?
A measure of reliance on borrowed funds
What are leverage ratios? ...Such as the Gearing Ratio.
If you're in to building houses it may be difficult to improve this ratio. But if you're a retailer like He Ma or Uniqlo I should be relatively high.
What is Inventory Turnover?
The best measure of whether an investment should be taken is net present value (NPV)
True or False
What is False? A business may use a combination of factors to determine whether an investment is worthwhile.
Cash comes in and Cash goes out. Details of from and to where can be seen on this statement
What is a Statement of Cash Flows?
A measure of how successful a company is in using their resources to achieve profits
What are profitability ratios?
If you're an investor, you'll probably compare this to the rate of interest that you could earn before risking your money.
What is Dividend Yield?
Average Annual Profit/ (Average Investment)
What is the Accounting Rate of return
Equals (Liabilities + Owner’s Equity) in the accounting equation.
What is Assets?
A measure of how successful a company is at turning inventory into sales.
What is inventory turnover ratio?
Offering discounts for quick payment such as 2% off if paid in 30 days is a great way to improve this efficiency ratio
What is Days in Trade Receivables?
1/(1+r)^t ... where r is equal to the rate of interest and t is equal to a period of time
What is a discount factor?