Chapter 3 Flashcards
1
Q
Common Size Stmts.
A
Standardized Financial STMT. Presenting all items in percentage terms.
2
Q
Liquidity Measures
A
Firms ability to pay its bills over short run w/o undue stress.
3
Q
Quick Ratio Formula
A
CA-Inventory/CL
4
Q
Cash Ratio Formula
A
Cash/CL
5
Q
Financial Leverage
A
Firms Long-run ability to meet obligations
6
Q
Asset Management
A
How efficiently a firm uses assets to generate sales.
7
Q
Inventory Turnover Formula
A
Cogs/Inv
8
Q
Receivable Turnover
A
Sales/ AR
9
Q
Payable Turnover
A
COGS/AP
10
Q
Dupont Identity
A
ROE = PM x TAT x EM
11
Q
Internal Growth Rate
A
maximum possible growth rate a firm can achieve w/o external financing
12
Q
Sustainable Growth Rate
A
maximum possible growth rate a firm can achieve w/o external equity finance while maintaining a constant debt-equity ratio.
