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  1. The current ratio is the ratio of __ to __.
    CA to CL
  2. 1)
    If net cash provided or used by operating, financing and
    investing activities are added together, the result is the _____.
    Change in cash
  3. ______ (also can be ______) is added to net
    income to determine CFO.
    • Depreciation
    • or
    • Amortization
  4. The amount of leverage used by the firm is determined by management decision with regard to the ______ problem.
    capital structure
  5. Three potential financial statement users are:
    • creditors,
    • investors and management.
  6. Stockholders’ return is measured by the____
    while management efficiency is measured by _____.
    • ROE
    • ROA
  7. ______ is an example of a coverage ratio.
    Times interest earned
  8. On the statement of cash flows the repayment of debt principal would be classified as a _____account.
  9. In the summary analysis (common-size) of the statement of cash flows from operations (if positive) shows the cash inflows as a percentage of total_____.
  10. Calculating cash flows from operating activities
    by subtracting cash paid to suppliers, employees, & other cash expenditures from cash collected from customers.
    Direct Method
  11. On the statement of cash flows the repayment of the current portion of long term
    debt would be classified as a ____________ activity
  12. Calculating cash flows from operating activities
    by adjusting net income for deferrals, accruals, and other non expenses.
    Indirect method
  13. Current assets minus current liabilities.
    Net working capital
  14. The Free Cash Flow for a firm is CFO minus ______
    capital expenditure
  15. Debt to asset ratio (market values) greater than 100%.
    Insolvent firm
  16. The E in the P/E ratio is
    found by dividing _______ by ______
    • Net income
    • # shares outstanding
  17. The change in retained earnings is often the product of both an______ and _____ activity.
    • Operating
    • Financing
  18. The four categroies of financial ratios
    discussed in class were:
    Liquidity, Activity, Profitability, Leverage
  19. Current Ratio=


  20. Quick ratio, or acid-test ratio =
    CA - Inventory


  21. Accounts Receivable Turnover =
    Net sales


    Net Accts Receivable
  22. Inventory Turnover =


  23. Total Asset Turnover =
    Net Sales


    Total Assets
  24. Debt to Asset ratio =


  25. Debt to Equity ratio =
    Total Liab


    Stockholders' equity.... (CA-CL)
  26. Gross Profit Margin =
    Gross Profit ...(net sales-COGS)


    Net sales
  27. Op Profit Margin =
    Op profit ....(Net earnings)


    Net sales
  28. Net Profit Margin =
    Net earnings


    Net sales
  29. ROA, or ROI
    Net earnings


    Total Assets
  30. ROE
    Net earnings


    Stockholders' equity... (ca-cl)
  31. Earnings per Common Share =
    Net earnings


    Ave Shares Outstanding
  32. P/E ratio =
    market price of common stock


    earnings per share of stock
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