+
Related Flashcards
Related Topics
Cards In This Set
| Front | Back |
|
What information does liquidity give?
|
Can the company survive in the short term
|
|
What are the two common measures of liquidity?
|
Working capital and current ratio
|
|
What information does solvency give?
|
Can the company survive in the long term
|
|
What is the common measure of solvency?
|
Debt/Equity
|
|
What information does profitability give?
|
Is the company making a profit that can be returned to shareholders
|
|
What are the common measures of profitability?
|
Gross profit margin, net profit margin, and return on equity
|
|
What is the formula for working capital?
|
Total current assets - Total current liabilities
|
|
What is the formula for current ratio?
|
Current assets / Current liabilities
|
|
What is the formula for debt to equity?
|
Total debt / Stockholders' equity
|
|
What is the formula for gross profit margin?
|
Gross profit / sales
|
|
What is the formula for net profit margin?
|
Net income / sales
|
|
What is the formula for return on equity?
|
Net income / average stockholders' equity
|
