financial indicator Flashcards
1
Q
what is efficiency?
A
the ability of the business to manage its assets and liabilities
2
Q
what is stability?
A
the ability of the business to meet its debts and continue its operations in the long term.
3
Q
what is profitability?
A
Refers the ability of the business to earn profit, measured by comparing its profit against a base
4
Q
What is liquidity?
A
Refers to the ability of the business to meet its short- term debts as they fall due.
5
Q
what are some benchmarks to assess profitability?
A
- Performance of previous, periods,
- Budgeted performance for the current period
- Performance of similar firms
6
Q
What is return on owner’s investment?
A
7
Q
what is inventory turnover?
A
refers to the average number of days it takes for a business to sell its inventory or convert its inventory into sales.
average inventory/ co
