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10 Cards in this Set
- Front
- Back
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Earnings per share |
Net earnings --------------------------- outstanding shares
how much profit per share (put at the end of statement of earnings) |
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Gross profit margin |
gross profit (found in S.o.E. or NS-COGS) --------------------------------- net sales
shows the excess of sales prices over the costs to purchase or produce the G/S (measured in %) |
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Net profit margin |
Net earnings (profit) ---------------------------- net sales
measures how much profit is earned as a % of revenue generated during the period (^ratio=effective mgmt sales & expenses) |
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Return on Assets |
Net Earnings -------------------------- avg total assets -> (beg+end)/2
or
profit+interest expense (net of tax) ------------------------------------------------ ave total assets
(^=better), how much firm has earned from the use of its total assets |
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Total (fixed) Asset Turnover |
Net sales ------------------------ Avg. (fixed) total assets
for every $1 of assets, the amount generated in sales |
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Return on Equity |
Net Earnings ----------------------- ave shareholders' equity
measures how much the firm earned as % of the investments made by shareholders (^=better, effective mgmt of Shareholder invest, rising price of shares) |
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Current Ratio |
Curent asset ----------------------- Current liabilities
shows how many times the company can repay short-term debt (^=better) |
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Trade receivables turnover |
net credit sales --------------------------- ave net trade receivables -> (R-AFDA)
(ave collection period: 365 / receivables turnover)
reflects how many times ave trade receivables were recorded and collected during the period (^ratio=faster collection of receivables) |
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Average age of trade receivables |
365 -------------------------- receivable turnover
how many days it takes to collect receivables (v=better, but should be around n/days) |
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Debt-to-Equity |
Total liabilities -------------------------- Total SE
the company's dependence on debt ) (between 1-2 is good)... if ratio is high, company relies on creditors |
