Chapter 3 Flashcards
operating expenses
marketing and selling expenses, general administrative expenses and depreciation expenses
gross profit margin
gross profit as % of sales
operating profit margin
measure of operating effectiveness in the company
low% - higher costs per dollar sales
net profit margin
net income as % of sales
treasury stock
firms stock that has been issued and then repurchased by firm
debt ratio
percentage of assets that financed by debt
marginal tax rates
tax rate that would be applicable to the next dollar of income
assets =
assets = liabilities + equity
types of assets
current, fixed, other
types of debt (liabilities)
current and long term
net working capital
companies ability to repairs its debt if it has capital
ratio between current assets:current liabilities needs to be greater than 1
taxable income
consists of operation income and capital gains
capital gains
gains from selling any asset that is not part of the ordinary operations
