chapter 3 Flashcards
(8 cards)
1
Q
5 categories of financial ratios
A
Short-term liquidity ratios
* Long-term solvency or financial leverage
ratios
* Asset management or turnover ratios
* Profitability ratios
* Market value ratios
2
Q
liquidity ratios (3)
A
ability to meet short term obligations usingmost liquid assets
current
quick
cash
3
Q
long term solvency ratios (3)
A
total debt
debt to equity
equity multiplier
4
Q
TA =
A
TD + TE
5
Q
profitability ratios (3)
A
profit margin
ROA
ROE
6
Q
du pont identity
A
deeper insight in how a company generates return on equity (ROE)
7
Q
du pont formula
A
PM x TAT x EM
8
Q
A
