Term
|
Definition
| An asset that can be converted to cash quickly without having to reduce the asset's price very much. |
|
|
Term
|
Definition
| Ratios that show the relationship of a firm's cash and other current assets to its current liabilities. |
|
|
Term
|
Definition
| This ratio is calculated by dividing current assets by current liabilities. It indicates the extent to which current liabilities are covered by those assets expected to be converted to cash in the near future. |
|
|
Term
|
Definition
| This ratio is calculated by deducting inventories from current asets and then dividing the remainder by current liabilities. |
|
|
Term
|
Definition
| A set of ratios that measure how effectively a firm is managing its assets. |
|
|
Term
|
Definition
| This ratio is calculated by dividing sales by inventories. |
|
|
Term
| Days Sales Outstanding (DSO) |
|
Definition
| This ratio is calculaed by dividing accounts receivable by average sales per day; it indicates the average length of tiem the firm must wait after making a sale before it receives cash. |
|
|
Term
| Fixed Assets Turnover Ratio |
|
Definition
| The ratio of sales to net fixed assets. |
|
|
Term
| Total Assets Turnover Ratio |
|
Definition
| This ratio is calculated by dividing sales by total assets. |
|
|
Term
|
Definition
| A set of ratios that measure how effectively a firm manages its debt. |
|
|
Term
|
Definition
| The ratio of total debt to total assets. |
|
|
Term
| Times-Interest-Earned (TIE) Ratio |
|
Definition
| The ratio of earnings before interest and taxes (EBIT) to interest charges; a measure of the firm's ability to meet its annual interest payments. |
|
|
Term
|
Definition
| A group of ratios that show the combine effects of liquidity, asset management, and debt on operating results |
|
|
Term
|
Definition
| This ratio measures operating income, or EBIT, per dollar of sales: it is calculated by dividing operating income by sales. |
|
|
Term
|
Definition
| This ratio measures net income per dolar of sales and is calculated by dividing net income by sales. |
|
|
Term
| Return on Total Assets (ROA) |
|
Definition
| The ratio of the net income to total assets. |
|
|
Term
| Basic Earning Power (BEP) Ratio |
|
Definition
| This ratio indicates the ability of the firm's assets to generate opearating income; it is calculated by dividing EBIT by total assets. |
|
|
Term
| Return on Common Equity (ROE) |
|
Definition
| The ratio of net income to common equity; measures the rate of return on common stockholder's investment |
|
|
Term
|
Definition
| Ratios that relate the firm's stock price to its earning and book value per share. |
|
|
Term
| Price/Earnings (P/E) Ratio |
|
Definition
| The ratio of the price per share to earning per share; shows the dollar amount investors will pay for $1 of current earnings |
|
|
Term
|
Definition
| The ratio of a stock's market price to its book value. |
|
|
Term
|
Definition
| An analysis of a firm's financial ratios over time; used to estimate the likelihood of improvement or deterioration in its financial condition |
|
|
Term
|
Definition
| A formula that shows that the rate of return on equity can be found as the product of net profit margin, total assets turnover, and the equity multiplier. It shows the relationships among asset managemtn, debt managemetn, and profitability ratios. |
|
|
Term
|
Definition
| The process of comparing a particular company with a set of benchmark companies. |
|
|
Term
| "Window Dressing" Techniques |
|
Definition
| Techniques employed by firms to make their financial statements look beter than they really are. |
|
|
