MFS - Accounting DOT Flashcards
(30 cards)
Measures that company’s ability to repay current liabilities using only current assets.
Working capital
Test of short-term dept-paying ability
Current ratio
Test of short-term dept-paying ability without having to rely on inventory
Acid-test ratio
Measures how many times a company’s accounts receivable have been turned into cash during the year.
Accounts receivable turnover
Measures the average number of days taken to collect an account receivable
Average collection period
Measures how many times a company’s inventory has been sold during the year
Inventory turnover
Measures the average number of days taken to sell the inventory one time.
Average sale period
Measures the elapsed time from when inventory is received from suppliers to when cash is received from customers.
Operating cycle
Measures how efficienty assets are being used to generate sales.
Total assets turnover
Measures the company’s ability to make interest payments.
Times interest earned ratio
Measures the amount of assets being provided by creditors for each dollar of assets being provided by the stockholders.
Debt-to-equity ratio
Measures the portion of a company’s assets funded by equity.
Equity multiplier
Measures profitability before selling and administrative expenses
Gross margin percentage
A broad measure of profitability.
Net profit margin percentage
Measures how well assets have been employed by management.
Return on total assets
When compared to the return on total assets, measures the extent to which financial leverage is working for or against common stockholders.
Return on equity
Affects the market price per share, as reflected in the price-earnings ratio.
Earnings per share
An index of whether a stock is relatively cheap or relatively expensive in relation to current earnings.
Price-earnings ratio
An index showing whether a company pays out most of its earnings in dividends or reinvests the earnings internally.
Dividend payout ratio
Shows the return in terms of cash dividends being provided by a stock.
Dividend yield ratio
Measures the amount that would be distributed to common stockholders if all assets were sold at their balance sheet carrying amounts and if all creditors were paid off.
Book value per share
A cost that is incurred to support a number of cost objects but that cannot be traced to them individually.
Common cost
Direct labor cost plus manufacturing overhead cost.
Conversion cost
The way in which a cost reacts to changes in the level of activity.
Cost behavior
