Ratios Flashcards
Accounts payable turnover ratio?
The accounts payable turnover ratio measures how quickly a business makes payments to creditors and suppliers that extend lines of credit.
Acid test / Quick ratio?
Ability to meet immediate debts with liquid assets.
Cash generating power ratio?
Company’s ability to generate cash purely from operations, compared to the total cash inflow.
Current ratio
The ability to pay off its current liabilities with its most current assets. (Quick test just a bit more accurate)
Debt ratio?
Measures the extent of a company’s leverage. Debt ratios measure the extent to which an organization uses debt to fund its operations.
Debt to equity ratio?
Measures the amount of debt the business has to the total value of the business
Dividend yield ratio?
The amount of dividens received compared to the cost price of a share.
Earnings per share ratio?
The average return each share makes on average. (NOT DIVIDENDS)
EBITDA?
The EBITDA margin is a measure of a company’s operating profit as a percentage of its revenue.
Equity ratio?
The equity ratio is the solvency ratio that helps measure the value of the assets financed/owned using the owner’s equity.
Gearing ratio?
Compares how much of the equity investment is owed to external parties, (Obligations)
Long term debt coverage
🗿 🗿 🗿 🗿 🗿 🗿 🗿 Basically the income operating to its long term debt
Operating cash flow ratio
Ratio between operating cash to total sales.
Rate of return on total assets.🗿 🗿 🗿 🗿
The rate of return the business earns (operating revenue) to its assets they own. Are the assets they own contribute enough to the return?
Times interest earned ratio??
The ability of a business to meet interest payments from current profits.
