Deck 15 Flashcards Preview

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Flashcards in Deck 15 Deck (19):
1

Inventory turnover in days (DIH)

Average inventory/ (COGS/365)

2

Working capital turnover

Sales/average working capital

3

Total asset turnover

Sales/Average total assets

4

Accounts payable turnover

Purchases/Average AP

5

Ending inventory

Beginning inventory + purchases - COGS

6

Days in accounts payable (DPO)

Average AP/ (purchases/365)

7

Net profit margin

Net income/net sales

8

Return on total assets

Net income/average total assets

9

Return on assets (alternate version)

Net profit margin x total asset turnover

10

Return on common equity

Net income - preferred dividends/Average common equity

11

Net operating profit margin

Net operating income/net sales

12

Gross (profit) margin percentage

Gross (profit) margin/Net sales

13

Operating cash flow per share

operating cash flow/common shares outstanding

14

Debt/equity

Total liabilities/common stockholders' equity

15

Debt ratio

Total liabilities/ total assets

16

A standard confirmation request seeks information on:

Contingent liabilities and security agreements in addition to information related to deposit account balances

17

Standard bank confirmation

Identify contingent liabilities because it contains confirmation of discounted drafts and/or guarantees of notes and/or other open letters of credit

18

Customer confirmations relate to:

Receivables

19

The primary evidence regarding year-end cash balances in the financial statements is documented in the:

Bank reconciliation