Term
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Definition
| Measures efficiency with which firm carries out its operating activities. |
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Term
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Definition
| net credit sales / average AR |
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Term
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Definition
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Term
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Definition
| Number of times AR is turned (incurred & collected) during a period. Quality of credit policy and efficiency of collection. |
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Term
| Number of Days Sales in AR Formula |
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Definition
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Term
| Number of Days Sales in AR Meaning |
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Definition
| Average number of days to collect AR or average age of AR. |
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Term
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Definition
| Cost of goods sold / average inventory |
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Term
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Definition
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Term
| Inventory Turnover Meaning |
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Definition
| Number of times inventory turns (acquired, sold and used) during a period. |
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Term
| Number of days Supply in Inventory Formula |
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Definition
| 360 / inventory turnover ratio |
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Term
| Number of days in inventory meaning |
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Definition
| Number of days inventory is held before sold or used. Determines efficiency of general inventory. |
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Term
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Definition
credit purchases / average AP
OR
(cost of goods sold + ending inv. - beginning) / average AP |
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Term
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Definition
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Term
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Definition
| Measures the number of times AP turns over in a period. Rate at which an entity pays its AP. |
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Term
| Number of days Purchases in AP Formula |
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Definition
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Term
| Number of days in AP meaning |
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Definition
| Average number of days to pay AP. Average age of AP. |
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Term
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Definition
| Focus on ability of firm to pay its obligations as they come due. |
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Term
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Definition
| Current assets - current liabilities |
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Term
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Definition
| Extent to which assets exceed liabilities. |
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Term
| Working Capital Ratio Formula |
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Definition
| current assets / current liabilities |
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Term
| Working capital ratio meaning |
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Definition
| Number of times current assets can cover current liabilities. |
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Term
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Definition
| (cash + net receivables + marketable securities) / current liabilities |
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Term
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Definition
| (cash + net receivables + marketable securities) / average daily cash expenditures |
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Term
| Average Collection period |
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Definition
| (Days in year * Average AR) / credit sales |
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Term
| Times interest earned ratio |
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Definition
| (Net income + interest expense + income tax expense) / interest expense |
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Term
| Times preferred dividends earned |
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Definition
| Net income / annual preferred dividend obligation |
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Term
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Definition
| measures aspects of a firm's operating (income/loss) results on a relative basis |
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
| Return on assets (investment) |
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Definition
| (Net income + interest expense - interest tax) / average total assets or investment |
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Term
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Definition
| net income / average stockholder's equity |
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Term
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Definition
| (net income - current preferred dividend) / average common equity |
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Term
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Definition
| average invested capital * hurdle rate |
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Term
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Definition
| net income - required return |
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Term
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Definition
| earnings before interest - [opportunity cost or rate of return * (LT debt - equity)] |
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Term
| Earnings per share (basic) |
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Definition
| (net income - preferred dividends) / weighted average # shares o/s |
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Term
| Diluted earnings per share |
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Definition
| (net income - preferred dividends + convertible stock dividends + tax affected convertible debt interest) / (weighted average shares + all shares assumed converted - shares assumed repurchased) |
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Term
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Definition
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Term
| Common stock dividend payout rate |
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Definition
| cash dividends to cs holders / NI to cs holders OR cash dividend per cs share / EPS |
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Term
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Definition
| dividend per cs / market price per share |
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Term
| Equity / Investment leverage ratios |
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Definition
| measure of relative source of equity and equity value |
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Term
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Definition
| total liabilities / total shareholder's equity |
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Term
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Definition
| shareholder's equity / total assets |
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Term
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Definition
| total liabilities / total assets |
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Term
| Book value per common stock |
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Definition
| CS equity / # cs shares outstanding |
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Term
| Book value per preferred share |
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Definition
| (preferred SH equity + dividends in arrears) # PS outstanding |
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