Flashcards in Chapter 15 Deck (29):

1

## Ratio that measures the number of times the company collects the average accounts receivable balance in a year

### Accounts Receivable Turnover Ratio

2

## Ratio that tells if the entity can pay all its current liabilities if they became due immediately

### Acid-Test Ratio

3

## Required by the SEC, provides information about company's financial condition

### Annual Report

4

## Measures how efficiently a business uses it average total assets to generate sales

### Asset Turnover Ratio

5

## Practice of comparing a company with other leading companies

### Benchmark

6

## Measure of a company's ability to pay current liabilities from cash and cash equivalents

### Cash Ratio

7

## Financial statement that reports only percentages

### Common-Size Statement

8

## Measure's the company's ability to pay current liabilities from current assets

### Current Ratio

9

## Measures the average number of days that inventory is held by a company

### Days' Sales in Inventory

10

## Ratio that tells how many days it takes to collect the average level of accounts receivable

### Days' Sales in Receivables

11

## Shows the proportion of assets financed with debt

### Debt Ratio

12

## Ratio that measures the proportion of total liabilities relative to total equity

### Debt to Equity Ratio

13

## Ratio of dividends declared per common share relative to the earnings per share of the company

### Dividend Payout

14

## Measures the percentage of a stock's market value that is returned annually as dividends to stockholders

### Dividend Yield

15

## Bias one sees from comparing numbers in absolute (dollars) rather than relative (percentage) terms

### Dollar Value Bias

16

## Amount of a company's net income for each share of its outstanding common stock

### Earnings per Share

17

## Measures the profitability of each sales dollar above the cost of goods sold

### Gross Profit Percentage

18

## Study of percent change in comparative financial statements

### Horizontal Analysis

19

## Measures the number of times a company sells its average level of merchandise inventory during a period

### Inventory Turnover

20

## Section of the annual report that is intended to help investors understand the results of operations and the financial condition of the company

### Management's Discussion and Analysis

21

## Measures the values the the stock market place on $1 of a company's earnings

### Price/Earnings Ratio

22

## Profitability measure that shows how much net income is earned on every dollar of net sales

### Profit Margin Ratio

23

## Shows relationship between net income available to common stockholders and their average common equity invested in the company

### Rate of Return on Common Stockholders' Equity

24

## Ratio that measures the success a company has in using its assets to earn income

### Rate of Return on Total Assets

25

## Evaluates a business' ability to pay interest expense

### Times-Interest-Earned Ratio

26

## Earning more income on borrowed money than the related interest expense, thereby increasing the earnings for the owners of the business

### Trading on the Equity

27

## Form of horizontal analysis where percentages are computed by selecting a base period of 100% and expressing amounts for following periods as a percentage of the base period amount

### Trend Analysis

28

## Analysis of financial statements that reveals the relationship of each statement item to it base amount of 100%

### Vertical Analysis

29