FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The specific financial aspects to be considered with your analysis are:
• Profit Margin
• Total Owners' Equity.
•
• Return on Equity.
• Debt Equity Ratio.
• Earnings per Share.
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- Question: Which financial ratio measures the proportion of net income generated per dollar of revenue? A) Return on Investment ( ROI) B) Operating Profit Margin C) Return on Sales (ROS) D) Earnings per Share (EPS)arrow_forwardQ: Choose all that apply: The following ratios may be impacted by the adoption of the new standard: A. Revenue growth B. Net margin C. Return on equity D. Price to earnings multiples E. Return on assets F. Debt to equity G. Current ratio The Question is: Why "Debt to equity" and "Current ratios" may be impacted?arrow_forwardBusiness ratios of financial statements are generally categorized as one of the following areas, EXCEPT Select one: a. Leverage b. Profitability c. Net Present Value d. Liquidity e. Efficiency (or Activity)arrow_forward
- I’m trying to do the debt to equity ratio. I understand that is total liabilities divided by stockholders equity. What would be my liability for the equation? Accounts receivable Inventory Net sales Cost of goods sold Total assets Total stockholders equity Net income arrow_forwardWhich of the following ratios is used to analyze a company's liquidity? a. Inventory turnover ratio b. Earnings per share c. Return on assets ratio d. Asset turnover ratioarrow_forwardUsing the information from 27A prepare the following ratios: gross profit margin profit margin return on assets earnings per share current ratio acid test ratio debt ratio Indicate what each is used for (ie: measuring efficiency, solvency etc)arrow_forward
- Indicate whether the following are a measure of (a) liquidity, (b) profitability, or (c) leverage. 1. Quick ratio 2. Times interest earned ratio 3. Current ratio 4. Ratio of net sales to assets 5. Return on total assets 6. Accounts receivable turnover 7. Return on stockholders' equity 8. Book value per share of common stock 9. Ratio of liabilities to stockholders' equity 10. Acid-test ratio 11. Earnings per share of common stock 12. Merchandise inventory turnover 13. Working capitalarrow_forward1. Which of the following is referred to as the Accounting Equation? Assets Liabilities + Equity Equity Liabilities + Assets Liabilities Assets + Equity Assets = Liabilities - Equity = 2. Which of the following make up the Finance Equation? (select all that apply) Revenues = Price x Volume Costs = Fixed + Variable Profit Revenues-Costs Income Sales - COGSarrow_forwardIdentify two ratios to use to analyze a firm’s liquidity position, andwrite out their equations.arrow_forward
- 5. Know the calculations for all of the following ratios (see ratio sheet that can be used on the exam) and know the category (listed in Question 4) they fall in: Formula Category/Use Ratio Working Capital Current Assets - Current Liabilities Net credit sales/Average Accounts Receivable Turnover accounts receivable Asset Turnover Net sales/Average total assets Net income/Average total stockholders' equity Total liabilities/Total stockholders equity Net income/Net sales Return on Equity (ROE) Debt to equity Return on Sales (ROS) (also known as Net Margin Current Assets/Current Liabilities Cost of goods sold/Average inventory Quick assets/Current Current Ratio Inventory Turnover Quick Ratio liabilities Dividend Yield Dividends per share/Market price per share Net earnings available for common stock/Number of outstanding common shares Net income/Average total Earnings per Share (EPS) Return on Investment (ROI) assets Price Earnings Ratio (P/E) Market price per share/Earnings per share…arrow_forward_______ ratios are used to measure the speed in which various assets are converted into sales or cash. A Debt (aka Leverage) B Efficiency (aka working capital) C Profitability C Coveragearrow_forward
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