Liquidity and probability and financial levarage(Sentence final answer) Flashcards
1
Q
Current Ratio
A
__> 1 = good ( It means that the CURRENT ASSETS exceeds its CURRENT LIABILITIES)
2
Q
Quick Ratio
A
__> 1 = good ( it means that the LIQUID ASSETS are greater than the CURRENT LIABILITIES.)
3
Q
Return on Equity
A
Per 1peso equity = •• centavo profit
4
Q
Return of assets
A
1 peso asset = •• centavo profit
5
Q
Gross profit margin
A
For every 1 peso in sales = •• centavos covers the marginal cost
6
Q
Net Profit Margin
A
For every 1 peso sale = •• centavo profit.
7
Q
ACCOUNTS RECEIVEBLE TURNOVER RATIO
A
the company collects its receivables •• times a year
8
Q
Inventory turnover ratio
A
inventory/product sells •• times a year.
9
Q
Accounts payable turnover ratio
A
company pays its suppliers •• times/year.
10
Q
Debt ratio
A
••% of the company’s assets are funded by debt.
