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acct 1235 > ratios > Flashcards

ratios Flashcards

1
Q

current ratios

A

liquidity measure
current assets/current liabilities

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2
Q

price - earnings ratio

A

market value price/company’s earnings per share
one profitability ratio

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3
Q

solvency ratio

A

determines long term survivability
total liabilities/total assets = %

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4
Q

Basic earnings per share (EPS) ratio

A

income to common shareholders/#of common shares
one profitability rstio

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5
Q

gross profit margin

A

net sales - cost of goods sold

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6
Q

profit margin

A

how much sales rev exceeds cost
(gross profit/total revenue)x100

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7
Q

dividend yield ratio

A

dividend per share/share price

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8
Q

profitability ratio

A

operating success for period
NOT CALCULATED
P/E or EPS

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9
Q

working capital equation

A

CA-CL

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10
Q

gross profit margin equation

A

gross profit / sales

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11
Q

profit margin equation

A

net income/sales

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12
Q

gross profit equation

A

sales - COGS

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13
Q

inventory turnover ratio equation

A

COGS/average inventory value
higher better
stuff being sold faster

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14
Q

days in inventory ratio equation

A

365/inventory turnover
lower better

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15
Q

receivable turnover ratio equation

A

credit sales/ avg gross AR
higher better, more liquid

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16
Q

average collection period ratio equation

A

365 days/receivables turnover

17
Q

return on assets equation

A

net income/ avg total assets

18
Q

asset turnover ratio equation

A

sales/avg total assets

19
Q

gross profit margin what it measures and desired result

A

difference between selling price and COGS
higher better

20
Q

profit margin what it measures and desired result

A

profit generated per dollar of sales
higher better

21
Q

asset turnover what it measures and desired result

A

how efficiently assets are used to generate sales
higher better

22
Q

return on assets what it measures and desired result

A

overall profitability of assets
higher better

23
Q

return on common SE what it measures and desired result

A

profitability of common share holders investments
higher better

24
Q

earnings per share what it measures and desired result

A

amount of profit earned on each share
higher better

25
Q

price - earnings ratio what it measures and desired result

A

market price per share vs earnings per share
higher better

26
Q

payout ratio what it measures and desired result

A

% of profit distributed as dividends
higher better from investor pov

27
Q

payout ratio what it measures and desired result

A

% of profit distributed as dividends
higher better

28
Q

dividend yield what it measures and desired result

A

dividends per share vs purchase price of shares
higher better

29
Q

return on common SE equation

A

(net income - preferred divis)/avg common SE equity

30
Q

return on common SE what it measures and desired result

A

how much common investors receive vs original investment
higher better

acct 1235 (13 decks)

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