M2 Income Statement and Balance Sheet Flashcards
1
Q
What is Current Ratio?
A
Current Assets / Current Liabilities
Measurement if a company has enough short term resources to cover their short term liabilities. You want to see a ratio of at least 1.
2
Q
What is Quick Ratio?
A
(Current Assets - Inventory) / Current Liabilities
3
Q
What is Debt to Equity Ratio?
A
Total Liabilities / Shareholder’s Equity
4
Q
How is a multiple step income statement organized?
A
Net Sales (COGS) ------------------- Gross Profit (SG&A) -------------------- Operating Income \+/- Other income (i.e. gain on sale) -------------------- Income from Continuing Operations (Income Tax Expense) ------------------- Income Before Discontinued Operations \+/- Discontinued Operations (after tax) -------------------- Net Income
5
Q
How are prior period adjustments reflected?
A
6
Q
What items are included comprehensive income?
A
PUFE P - Pension adjustments U - Unrealized gains/losses F - Foreign currency items E - Effective portion of cash flow hedges
