Chapter 12 Flashcards
Financial ratios that indicate how well a corporation is managing its
operations.
activity ratio
A formula
used to estimate how close a company is to
declaring bankruptcy.
Altman’s Z-Value Bankruptcy
Formula
A document published each
year by a company to show its financial condition and products.
annual report
Income statements and balance sheets in which the dollar figures have been converted into
percentages.
common-size statement
Dollars adjusted for inflation.
constant dollars
A measure of the total output of goods and services
within a country’s borders.
gross domestic product (GDP)
A calculation that shows how much of the growth rate of
sales can be sustained by internally generated
funds.
index of sustainable growth
An evaluation of how effectively a company utilizes its resources to generate revenues.
Leverage ratio
The percentage showing to
what degree a company can cover its current
liabilities with its current assets.
liquidity ratio
The rate of interest banks
charge on their lowest-risk loans.
prime interest rate
Ratios evaluating a company’s ability to make money over a period of time.
profitability ratio
The calculation of ratios from
data in financial statements to identify possible strengths or weaknesses.
ratio analysis
from the year of the case can be very
helpful.
SEC 10-K form
include quarterly financial reports.
SEC 10-Q form
include detailed information on members of a company’s
board of directors and proxy statements for annual meetings.
SEC 14- A form
