Flashcards
Topic 12 - Ratio analysis
Cards in this deck (19)
- 1Asset efficiencyThe entities ability to utilise their assets efficiently.
- 2Capital structureThe proportion of assets financed by debt rather that by equity
- 3LiquidityAbility to convert assets to cash
- 4Current ratioAn entities ability to pay current liabilities. Compares current assets to current liabilities. Assets:liabilities
- 5Quick ratiomore accurate measure of an entities ability to pay debts as is excludes inventory ( which may not be able to be sold and have cash collected in time)
Can be know as the acid ratio - 6Days ratioThe average period of time it takes for an entity to sell its inventory.
- 7Days DebitorsThe average period of time it takes the entity to collect cash from their accounts recoverable.
- 8Debt ratioTells us what proportion of an entities assets have been funded by debt.
- 9Equity ratioTells us what proportion of and entities assets have been funded by equity.
- 10Debt to equity ratioCompares the entities liabilities to the owners equity.
- 11Return on equity (ROE)Tells us the amount of money that the company has made with the funds of shareholders (equity).
It is the amount of net income returned as a percentage of the owners equity. - 12Earnings per share (EPS)Tells us the amount of money that the entity will make per share. It gives us a proportion of income over shares and is a measure of a companies profitability.
Can be used to compare companies within the same industry. - 13Payout ratioThe percentage of profits given out as divadends.
Gives an indications to the sustainability of a companies dividend giving outing. - 14Dividends per shareTells us the actual dividends given out per share and allows investors to determine the amount of dividends a shareholder will receive.
- 15PE ratioTells you how much money you will spend for every dollar of earnings ( lower is better)
- 16ROAGives us the profit return an entity is generating from its assets. This is a percentage.
Tells us how efficiently an entity creates wealth from the assets that they have. - 17Asset TurnoverMeasures an entities efficiently at generating sales.
Tells us how much revenue is generated per dollar of assets invested. - 18Profit marginMeasures the profit earned per dollar of sales revenue. Measured as a percentage
- 19gross profit marginCompares gross profit to sales margins. Shows the mark up an entity has earned on it products.
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- University ACC1200 Flashcards on Topic 12 - Ratio analysis, created by Finn Cole-Adams on 13/06/2016.
- Created by
- Finn Cole-Adams · Jun 2016
- Updated
- Jun 17, 2016
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