F2- M8 - Ratio Analysis Flashcards Preview

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Flashcards in F2- M8 - Ratio Analysis Deck (32)
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1
Q

________ are financial indicators that distill relevant information about a business entity by quantifying the relationship among selected items on the financial statements.

A

Ratios

2
Q

An entity’s ratios may be compared with ratios ____________. An entity’s ratios may also be compared with _______________.

A

1) ratios of a different period of that entity, 2) compared with competitor ratios and industry ratios.

3
Q

________ ratios are measures of a firm’s short-term ability to pay maturing obligations.

A

Liquidity

4
Q

_________ratios are measures of how effectively an enterprise is using its assets.

A

Activity Ratios

5
Q

___________ratios are measures of the success or failure of an enterprise for a given time period.

A

Profitability Ratios

6
Q

_______ ratios are measures of security or protection for long-term creditors/investors.

A

Coverage Ratios

7
Q

What are the limitations for ratios

A

they depend entirely on the reliability of the data on which is based on server factors (such as historical cost, estimates)

8
Q

What is the formula for Current Ratio

A

Current Assets - Current Liabilities

9
Q

What is the formula for Quick Ratio

A

Current Assets - Inv - Prepaids/ Current Liabilities

10
Q

What is the formula for A/R Turnover

A

Net Sales (Sales - Returns)/ Avg net A/R (Beg + ending/2)

11
Q

What is the formula for days in A/R

A

Ending Net AR/ Net Sales

12
Q

What is the formula for days in Inventory Turnover

A

COGS/ Average Inventory

13
Q

What is the formula for days in Days in Inventory

A

Ending Inventory/ COGS/365

14
Q

What is the formula for AP Turn over

A

COGS/Average AP

15
Q

What is the formula for days in Payables outstanding

A

Ending AP/ COGS/365

16
Q

What is the formula for the cash conversion Cycle

A

Days in AR + Days in Inv - Days of Payable Outstanding

17
Q

What is the formula for Asset Turnover

A

Net Sales/ Avg Total Assets

18
Q

What is the formula for profit margin

A

Net Income/ Net Sales

19
Q

What is the formula for the Operating Cycle

A

Days in AR + Days in Inv

20
Q

What is the Dupont ROA formula

A

PM X Asset Turnover

21
Q

What is the formula for Return on Sales

A

EBIT/Net Sales

22
Q

What is the formula for return on Asset

A

Net Income/ Avg total Assets

23
Q

What is the formula for ROE

A

Net income/ Avg Total Equity

24
Q

What is the formula for Gross Profit Margin

A

Net Sales - COGS/ Net Sales

25
Q

What is the formula for Operating Cash Flow

A

Cash flow from Ops/ Current Liabilites

26
Q

What is the formula for Debt to Equity

A

Total Liabilities/ Total Equity

27
Q

What is the formula for Total Debt Ratio

A

Total Liabilities/ Total Assets

28
Q

What is the formula for Equity Multiplier

A

Total Assets/ Total Equity

29
Q

What is the formula for Times interest earned

A

EBIT/ Interest Exp (take out int Exp)

30
Q

What is the formula for EPS

A

Ni - Preferred Dividends/ Weight Avg CS Outstanding

31
Q

What is the formula for Price earnings ratio

A

Price per share/ Basis EPS

32
Q

What is the formula for Dividend Payout

A

Cash dividends/ Net income

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