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Finance > Exam 1 > Flashcards

Exam 1 Flashcards

1
Q

Current ratio

A

Current assests/current liabilities

liquidity

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2
Q

Quick Ratio (QR)

A

(Current assets- inventory)/ current liabilities

liquidity

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3
Q

Average collection period (ACP)

A

Accounts receivable/ daily credit sales
(liquidity)
[DCS= sales/365]

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4
Q

Accounts receivable turnover

A

credit sales/ accounts receivable

liquidity

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5
Q

inventory turnover

A

cost of goods sold/ inventory

liquidity

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6
Q

Total asset turnover (TAT)

A

sales/total assets

efficiency

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7
Q

Fixed asset turnover

A

sales/fixed assets

efficiency

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8
Q

Operating income on return on investment (OIROI)

A

Earnings before tax and interest/ Total assets

[EBIT= sales-interest-tax)

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Finance (3 decks)

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