Chapter 15 Flashcards Preview

ACC-225 > Chapter 15 > Flashcards

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

Measure of a business' ability to meet its short-term obligations with its current assets

Working Capital