LIQUIDITY
a firm’s ability to pay its short-term obligations
SHOWS HOW WELL A COMPANY CAN GENERATE PROFIT
WHAT ARE PROFITABILITY RATIOS?
OUTSTANDING PAYMENTS FROM VENDORS THAT OWE THE COMPANY
WHAT ARE ACCOUNTS RECEIVABLE?
ANOTHER NAME FOR LEVERAGE RATIOS
WHAT ARE DEBT RATIOS?
P&L Profit & Loss
What is another name for the income statement?
current assets/current liabilities
REVENUE - COST OF GOODS SOLD, OR ALSO KNOWN AS NET SALES
WHAT IS GROSS MARGIN?
COST OF GOODS SOLD/AVERAGE INVENTORY
WHAT IS INVENTORY TURNOVER?
MEASURES THE COMPANY'S ABILITY TO PAY ITS LONG TERM DEBTS
WHAT IS THE PURPOSE OF LEVERAGE RATIOS?
REPORTS THE CASH FLOWS IN AND OUT OF THE BUSINESS
WHAT IS THE CASH FLOW STATEMENT?
where to find the current assets
WHAT IS PROFIT EARNED PER SHARE OUTSTANDING?
WHAT ARE EARNINGS PER SHARE?
FOR THIS ACTIVITY RATIO, WE NEED TO USE THE INCOME STATEMENT (NET SALES) AND THE BALANCE SHEET (AVG ACCOUNTS REC)
WHAT IS THE ACCOUNTS RECEIVABLE TURNOVER RATIO?
HOW MUCH THE COMPANY IS FINANCED BY DEBT AND EQUITY
WHAT IS THE DEBT TO EQUITY RATIO?
ASSETS = LIABILITY + EQUITY
WHAT IS THE ACCOUNTING EQUATION OR WHAT IS THE BALANCE SHEET?
whether the company can pay its bills without selling inventory
What is the quick ratio?
NET INCOME/TOTAL OWNERS EQUITY
WHAT IS RETURN ON EQUITY?
Activity ratios analyze how well a company is managing and making use of its ________.
WHAT ARE ASSETS?
TOTAL LIABILITIES/TOTAL ASSETS
WHAT IS THE DEBT TO TOTAL ASSETS RATIO?
WHAT WE OWE
WHAT ARE LIABILITIES?