M2 Flashcards
(24 cards)
A financial statement providing insights on a company’s operations for a specific period.
Income Statement
What information does an income statement provide?
Information on revenues and expenses that result in either net income/profit or net loss.
Income statement format where expenses are presented in a straightforward manner.
Nature of expenses
A financial statement that includes the amounts of a company’s assets, liabilities, and owners’ equity.
Balance Sheet
Fill in the blank: An income statement is also known as a _______.
Statement of Comprehensive Income
Fill in the blank: A balance sheet is also known as a _______.
Statement of Financial Position
Current Ratio Formula
Current Assets / Current Liabilities
Quick Ratio Formula
Cash + Short-term Investments + Receivables / Current Liabilities
Cash Ratio Formula
Cash + Short-term Investments / Current Liabilities
Gross Profit Margin Formula
Gross Profit / Total Revenue
Net Profit Margin Formula
Net Profit / Total Revenue
Return on Assets Formula
Net Profit / Average Total Assets
Return on Equity Formula
Net Profit / Average Total Equity
Inventory Turnover Formula
COGS / Average Inventory
Receivables Turnover Formula
Total Revenue / Average Receivables
Payables Turnover Formula
COGS / Average Payables
Average Age of Inventory Formula
365 / Inventory Turnover
or
(Average Inventory / COGS) * 365
Average Collection Period Formula
365 / Receivables Turnover
or
(Average Receivables / Total Revenue) * 365
Average Payment Period Formula
365 / Payables Turnover
or
(Average Payables / COGS) * 365
Debt Ratio Formula
Total Liabilities / Total Assets
Debt-to-Equity Ratio Formula
Total Liabilities / Total Equity
Interest Coverage Ratio Formula
EBIT / Interest Expense
Operating Cycle Formula
Average Age of Inventory + Average Collection Period
Net Operating Cycle Formula
Average Age of Inventory + Average Collection Period - Average Payment Period
