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Financial Accounting > Ch. 2 - Financial Statements and the Annual Report > Flashcards

Ch. 2 - Financial Statements and the Annual Report Flashcards

1
Q

What is the formula for working capital?

A

Current Assets - Current Liabilities

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2
Q

What is the formula for the current ratio, and what does it measure?

A

Current Assets / Current Liabilities

The current ratio is a measures of the liquidity of a company

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3
Q

What is the formula for the profit margin?

A

Net Income / Sales

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4
Q

What is liquidity?

A

Liquidity is the ability of a company to pay its debts as they come due

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Financial Accounting (7 decks)

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