chap 14 (ratios Flashcards
1
Q
What are Liquidity Ratios used for?
A
To Measure short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash
2
Q
What are Solvency Ratios used for?
A
To Measure the ability of the company to survive over a long period of time; the ability to pay its total liabilities
3
Q
What are Profitability Ratios used for?
A
To measure the operating success of a company for a specific period of time
4
Q
What are all the Liquidity Ratios?
A
Current ratio, Receivables turnover, average collection period, inventory turnover
5
Q
What are all the Solvency Ratios
A
Debt to total assets, times interest earned
6
Q
What are all the Profitability Ratios?
A
Gross profit margin, profit margin, assets turnover, return on assets
