Financial Ratios
= 365 days in the year DIVIDED BY the accounts receivable turnover
# of Days for AR receivable
= 365 days DIVIDED BY the inventory turnover
# of days sales in Inventory
= Net income (After tax) / Avg Stockholder equity
After-Tax Return
A balance sheet which reports percentages of total assets instead of dollar amounts is referred to as a __________-__________ balance sheet
Common Size
Which of the following are likely to have the reported amounts on the balance sheet being close to their current value? Current Assets Long-term Assets Stockholders' Equity
Current Assets
= current assets DIVIDED BY current liabilities
Current Ratio
Current assets DIVIDED BY current liabilities is the Current Ratio Net Worth Ratio Working Capital
Current Ratio
= (Total Liabilities / Total Equities) : 1
Debt-To-Equity Ratio
A corporation's excellent reputation will be listed among the corporation's assets on its balance sheet. True False
F
The current market value of a corporation is approximately the amount reported on the balance sheet as stockholders' equity. True False
F
Free cash flow is the cash provided by operating activities minus the cash used by financing activities. True False
F Free cash flow is cash provided by operating activities minus capital expenditures.
Which of the following is not a current asset? Inventory Prepaid Insurance Fixtures
Fixtures
The quick ratio EXCLUDES which of the following? Accounts Receivable Inventory Cash
Inventory
The quality of a company's earnings are suspect when the company's net income is more than the cash flow from which activities? Operating Investing Financing
Operating
= [(Cash + Temporary Investments + Accounts Receivable) DIVIDED BY current liabilities] :
Quick Ratio (Acid test)
= Credit Sales DIVIDED BY average Accounts Receivable.
The accounts receivable turnover
= Cost of Goods Sold DIVIDED BY average Inventory.
The inventory turnover
= Earnings + interest expense + Income tax / interest expense
Times Interest Earned
Current asset MINUS current liabilities is the Current Ratio Net Worth Working Capital
Working Capital
