Chap 23 Flashcards
Accounts Receivable Turnover
a measure of the speed with which sales on account are collected; the ratio of net credit sales to average receivables
Acid Test Ratio
a measure of immediate liquidity; the ratio of quick assets to current liabilities
Asset Turnover
a measure of the effective use of assets in making sales; the ratio of net Saales to total sales
Average Collection Period
the ratio of 365 days to the accounts receivable turnover; also called the number of days sales in receivables
Common-Size Statements
financial statements with items expressed as percentage of a base amount
Comparative Statements
financial statements presented side by side for two more years
Horizontal Analysis
computing the percentage of change for individual items in the financial statements from year to year
Industry Averages
financial ratios and percentages reflects averages for similar companies
Leveraged Buyout
purchasing a business by acquiring the stock and obligating the business to pay the debt incurred
Price-Earnings Ratio
the ratio of the current market value of common stock to earnings per share of the stock
Quick Assets
cash, receivables, and market securities
Ratio Analysis
computing the relationship between various items in the financial statements
Return on Common Stockholders’ Equity
a measure of how well the corporation is making a profit for its shareholders; the ratio of net income available for common stockholders to common stockholder’s equity
Total Equities
the sum of a corporation’s liabilities and stockholders’ equity
Trend Analysis
comparing selected ratios and percentages over a period of time
