Wall Street Prep Accounting
Liquidity Ratios (Ans- measures of a firm's short-term ability to meet its current obligations
Profitability Ratios (Ans- measures of a firm's profitability relative to its assets (operating efficiency) and to its revenue (operating profitability)
Activity Ratios (Ans- Measure of efficiency of a firm's assets
Solvency Ratios (Ans- Measure of a firm's ability to pay its obligations
Inventory Turnover (Ans- COGS / avg inventory
Receivables Turnover (Ans- revenue / average accounts receivable
DSO (Days Sales Outstanding) (Ans- AR/Credit Sales * days in period days in period/receivables turnover
A/P turnover (Ans- COGS / Average A/P
PPP (payables purchasing period) (Ans- days in period/ Accounts payable turnover
Current Ratio (Ans- current assets/current liabilities
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Quick ratio (acid test) (Ans- Cash and AR divided by current liabilities
Gross profit margin (Ans- gross profit/revenue
operating margin (Ans- operating profit/revenue
net profit margin (Ans- net income/revenue
asset turnover (Ans- revenue/ average assets
return on assets (ROA) (Ans- Net Income / Average Assets
return on equity (ROE) (Ans- net income/ total equity
Basic EPS (Ans- (Net Income - Preferred Dividends)/(Weighted Average of Shares Outstanding)
Diluted EPS (Ans- diluted net income / weighted average diluted shares outstanding
dividend yield (Ans- dividends/net income
debt to EBITDA (Ans- Total Debt/EBITDA
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interest coverage ratio (Ans- EBIT/ interest expense
fixed charge coverage (Ans- (EBIT + Lease charges)/(Interest Payments + Lease charges)
Debt to Total Assets (Ans- Total Debt/Total Assets
debt to equity (Ans- total liabilities/total equity
cash from operations (CFO) (Ans- uses net income as a starting point and converts accrual base net income into cash flow from operations via a series of adjustments
cash from investing activities (CFI) (Ans- capital expenditures / asset sales and purchases
cash from financing activities (CFF) (Ans- new borrowing / pay down of debt / new issuance of stock / share repurchases / issuance of dividends
working capital (Ans- -CFO -increase in current assets = cash outflow -increase in current liabilities = cash inflow
asset write downs / impairments (Ans- -added back to CFS via CFO
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