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Flashcards in Chapter 3 Deck (23):
1

Common-Size Statement

Standard financial statement presenting all items in percentage terms. Balance sheet items are shown as a percentage of assets and income statement items as a percentage of sales.

2

Financial Ratios

Relationships determined from a firm's financial information and used for comparison purposes.

3

Current Ratio

Current Assets / Current Liabilities

4

Quick Ratio

Current Assets - Inventory / Current Liabilities

5

Total Debt Ratio

Total Assets - Total Equity / Total Assets

6

Debt-Equity Ratio

Total Debt / Total Equity

7

Equity Multiplier

Total Assets / Total Equity

8

Times Interest Earned

EBIT / Interest

9

Inventory Turnover

CGS / Inventory

10

Days' Sales in Inventory

365 / Inventory Turnover

11

Receivables Turnover

Sales / Accounts Receivable

12

Days' Sales in Receivables

365 / Receivables Turnover

13

Total Asset Turnover

Sales / Total Assets

14

Profit Margin

Net Income / Sales

15

Return on Assets (ROA)

Net Income / Total Assets

16

Return on Equity (ROE) - Short

Net Income / Total Equity

17

EPS

Net Income / Shares Outstanding

18

PE Ratio

Price Per Share / Earnings Per Share

19

Market-to-Book Ratio

Market Value Per Share / Book Value Per Share

20

Return on Equity (ROE) - Long

(Net Income/Sales) X (Sales/Assets) X (Assets/Total Equity)

21

Internal Growth Rate

Max possible growth rate for a firm that relies only on internal financing

22

Sustainable Growth Rate

Max possible growth rate for a firm that maintains a constant debt ratio and doesn't sell new stock

23

Standard Industrial Classification (SIC) Code

US Government code used to classify a firm by its type of business operations