SIE 367

Card Set Information

Author:
driven360
ID:
217878
Filename:
SIE 367
Updated:
2013-05-05 16:31:08
Tags:
Financial measurements
Folders:

Description:
SIE 367 U OF A
Show Answers:

Home > Flashcards > Print Preview

The flashcards below were created by user driven360 on FreezingBlue Flashcards. What would you like to do?


  1. §Debt Ratio- This is a measure of
    the amount of debt used to finance assets.
    = AVG Debt / AVG Assets

    •   
    • Debt excludes Payables
  2. §Interest Coverage Ratio- Used by
    lending institutions to determine ability to meet loan expenses.
    • = EBIT (Earnings Before Interest & Taxes) / Interest
    • Expense
  3. §Working Capital- Measures a
    company’s ability to pay current liabilities.
    • = AVG Current Assets – AVG Current
    • Liabilities
  4. Current Ratio- Illustrates excess
    coverage of current assets to pay current debts
    • = AVG Current Assets / AVG Current
    • Liabilities
  5. §Quick Ratio (Acid Test)- Harsh test
    to determine ability to pay current obligations
    • = (AVG Current Assets – AVG
    • Inventory) / AVG Current Liabilities
  6. Inventory Turnover- Measures how
    frequently inventory is replenished
    • = Sales per unit Time / AVG
    • Inventory

    • Note: Reciprocal is shelf life of
    • inventory
  7. Accounts Receivable Turnover-
    Measures frequency of A/R collection per unit time
    • = Sales per unit Time / AVG
    • Receivables

    • Note: Reciprocal is Receivables
    • collection time
  8. §Total Assets Turnover- Measures how
    well a firm uses it’s assets to produce revenue.
    • = Sales per unit Time / AVG Total
    • Assets

    • Note: Reciprocal is Asset
    • Utilization, the time assets are used to produce revenue
  9. §Gross Margin- Ratio of Gross Profit
    to Sales (%).
    = Gross Profit / Sales
  10. §Net Margin- Ratio of Net Income to
    Sales (%).
    = Net Income / Sales
  11. §Return on Total Assets- Measures a
    company’s utilization of assets to earn a profit.
    • ={ (Net Income + (Interest Expense) * (1 –
    • Tax rate))} / AVG Total Assets
  12. §Return on Equity- Measures the return of
    a company per dollar of shareholder equity.
    = Net Income / AVG Shareholder Equity
  13. Annual Averages of Balance Sheet
    values are computed as follows from Monthly Balance Sheets:
    summation of 12 month balance sheet value/ 12

What would you like to do?

Home > Flashcards > Print Preview