Financial Ratios Flashcards
1
Q
Book Value per Common Share
A
Common Equity / Common Shares Outstanding
2
Q
Payout Ratio to Common Shareholders
A
Total Common Dividends Paid / Net Income Available to Common Shareholders
3
Q
Return on Common Equity
A
Net Income - Preferred Dividends
Avg. Common Equity
Avg. Common Equity = Common Equity + Retained Earnings
4
Q
In computing inventory turnover, why is the cost of sales the preferred base?
A
Cost of sales eliminates changes in sale prices and cannot be manipulated by management
5
Q
Inventory turnover (ratio)?
A
COGS
Avg. Inventory
6
Q
Return on Common Equity
A
Net Income
Avg. Common Equity
7
Q
Common Equity
A
Common Stock (Par) + Common APIC + Retained Earnings
8
Q
A
