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Financial Accounting retake 2024 > Ratios > Flashcards

Ratios Flashcards

Ratios from all the lessons

1
Q

market-to-book ratio

A

market value (per share)/ book value (per share) OR market value/ book value

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1
Q

market value

A

market to book ratio x book value

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2
Q

goodwill

A

takeover price - book value ((price paid per share - book value per share) x no. of shares bought) (total price paid - book value of shares bought)

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3
Q

total takeover amount

A

goodwill + financial assets

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4
Q

group profit

A

profit hunter + profit target - minority interest

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5
Q

earnings per share (EPS)

A

net income / no. of shares

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6
Q

price to earnings ratio (P/E ratio)

A

market price of a share / EPS

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7
Q

Liquidity ratios

A

current ratio, quick ratio, net working capital

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8
Q

current ratio

A

current assets/ current liabilities

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9
Q

quick ratio

A

(current assets - inventory) / current liabilities

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10
Q

net working capital

A

current assets - current liabilities

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11
Q

Leverage ratios

A

debt ratio, debt to equity ratio, times interest earned

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12
Q

debt ratio

A

total debt/ total assets

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13
Q

debt to equity ratio

A

total debt/ total equity

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14
Q

times interest earned

A

EBIT/ interest costs

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15
Q

profitability ratios

A

return on equity, return on debt, return on investment, margin on sales

16
Q

return on equity (ROE)

A

annual profit/ equity

17
Q

return on debt

A

annual interest/ total debt

18
Q

return on investment

A

annual EBIT/ total investment (=equity + debt)

19
Q

margin on sales

A

annual EBIT/ sales

20
Q

ROE/ leverage effect

A

ROI + (ROI - ROD) x (debt/ equity)

21
Q

Activity ratios

A

average collection period, average inventory period, turnover rate

22
Q

average collection period

A

accounts receivable/ annual sales x 365 days

23
Q

average inventory period

A

inventory level/ annual cost of sales x 365 days

24
Q

turnover rate

A

annual sales/ total assets

25
Q

valuation ratios

A

earnings per share, price to earnings ratio, dividend yield, total yield, dividend cover, pay out ratio, market to book ratio

26
Q

dividend yield

A

dividend per share/ market price per shae (at begin year)

27
Q

dividend cover

A

net earnings/ dividends

28
Q

pay out ratio

A

dividend/ (net) earnings

29
Q

market to book ratio

A

market value/ book value

Financial Accounting retake 2024 (2 decks)

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