What is the Roles of Ratio Analysis in Business Decisions Flashcards

BUS FIN 420 OSU

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A statement which presents all items in percentage terms is called a(n):
Common-Size Statement
Relationships determined from a firm’s financial information and used for comparison purposes are known as
Financial Ratios
Short-term solvency ratios are also referred to as
Liquidity Measures
Current Assets/Current Liabilities
Current Ratio
The acid-test ratio is also called the
Quick Ratio
Cast/Current Liabilities
Cash Ratio
Ratios which analyze a firm’s ability to meet its long-term obligations are called:
Leverage Ratios
The ratio which includes all debts of all maturities to all creditors is called the:
Total Debt Ratio
The financial ratio which is defined as earnings before interest and taxes divided by interest paid is called the:
Times Interest Earned
Earnings before interest and taxes plus depreciation divided by interest paid
Cash Coverage Ratio
ratios which measure how efficiently a firm uses its assets to generate sales
Asset Utilization Ratios
Cost of goods sold divided by inventory
Inventory Turnover Ratio
The number of days it takes a firm to sell its inventory is called the
Days Sales in Inventory
The number of times a firm collects their outstanding credit accounts and reloans the money in one year is called the
Receivables Turnover
365 days divided by the receivables turnover
Days Sales in Receivables