Terms

Question 1

Current Ratio

Answer 1

Current Assets
______________
Current Liabilities

Question 2

Debt Ratio

Answer 2

Total Liabilities
_____________
Total Assets

Question 3

Debt to Equity ratio

Answer 3

Total Liabilities
________________
Total Owners’ Equity

Question 4

A/R Turnover

Answer 4

Sales
____________
A/R

Question 5

Days Sales in A/R

Answer 5

365
____________
A/R Turnover

Question 6

Inventory Turnover

Answer 6

COGS
____________
Inventory

Question 7

Days Sales in Inventory

Answer 7

365
____________
Inventory Turnover

Question 8

Earnings per Share

Answer 8

Net Income
__________________________
# of shares of Stock Outstanding

Question 9

Book Value per Share

Answer 9

Owners’ Equity
_________________________
# of shares of stock outstanding

Question 10

Price-Earnings Ratio

Answer 10

Total Market Value of Shares
________________________
Net Income

OR

Market Value per share
___________________
Earnings per share

Question 11

Return on Sales

Answer 11

Net Income
____________
Sales

Question 12

Return on Equity

Answer 12

Net Income
____________
Owners’ Equity

Question 13

Asset Turnover

Answer 13

Sales
____________
Total Assets

Question 14

Goodwill equation

Answer 14

GW= purchase price - fair value of net assets ( assets - liabilities)

Question 15

Fair value of net assets equation

Answer 15

FV= Assets - Liabilities

Question 16

Book Value equation

Answer 16

original cost - accumulated depreciation thus far

Question 17

Gain/Loss equation

Answer 17

SALES PRICE - book value

Question 18

Return on equite (ROE) equation

Answer 18

Net income
_____________
Stockholders equity

Question 19

Return on equity equations split up

Answer 19

Net income/ sales

• Sales/Assets
• Assets/Equity

Question 20

Net income / Sales is what

Answer 20

Profitability and profit margin ratio

Question 21

Sales/Assets is what

Answer 21

Efficiency and asset turnover ratio