Chapter 5 Flashcards
0
Q
Solvency Ratio
A
= Net worth ➗ Total assets
1
Q
Liquidity Ratio
A
=Liquid Assets ➗ Total current debts
Current liabilities + annual loan payments
2
Q
Net cash flow
A
= income - expenses
3
Q
Debt service ratio
A
= total debt payments ➗ net income
4
Q
Savings ratio
A
= net cash flow + amounts already saved or invested ➗ annual after tax income.
