Exam 1 Flashcards
(16 cards)
EPS
Net Income / Average Shares
Revenues are Debit or Credit?
Credits
Expenses are Debit or Credit?
Debit
Asset Turnover Ratio
Net Sales / Average Assets
Efficiency
Gross Profit Margin
Gross Profit / Sales
Net Profit Margin
Net Income / Sales
Profitability on Sales
Debt Covenants
Promises to, for example, keep EPS above $1 or something
Debt to Equity
Total Liability / Stockholders Equity
Debt to Assets
Total Liability / Total Assets
Current Ratio
Current Assets / Current Liabilities
Working Capital
Current Assets less Current Liabilities
ROA Equation
Net Profit Margin x Asset Turnover Ratio
Premium Products
Less Asset Turnover, more Profit Margin
Expense Matching Principle
Revenues and expenses are recorded as they are incurred, no matter when cash is received
Auditors Verify or Make Financial Statements
Verify Financial Statements
Managers Verify or Make Financial Statements
Make Financial Statements
