Financial Ratios & Analysis: Working Capital, Liquidity, Leverage, Profitability & Costs, Quizzes of Management Accounting

Download Financial Ratios & Analysis: Working Capital, Liquidity, Leverage, Profitability & Costs and more Quizzes Management Accounting in PDF only on Docsity! TERM 1 Working capital DEFINITION 1 current assets - current liabilityLiquidity TERM 2 Current Ratio DEFINITION 2 current assets / current liabilitiesLiquidity TERM 3 Acid (Quick) Test DEFINITION 3 (Cash + Cash Equivs + A/R) / current liabilitiesLiquidityPS - Inventory and Prepaids don't get counted - I ALWAYS mess that up. TERM 4 A/R Turnover DEFINITION 4 Net credit sales / Avg. A/R balanceLiquidityPS:1.) Use only 2 years for calculating avg. A/R balance.2.) If you dont know which are credit sales, assume all are credit sales TERM 5 Avg. Collection Period DEFINITION 5 365 / A/R TurnoverLiquidity TERM 6 Inventory Turnover DEFINITION 6 COGS / Avg. Inventory BalanceLiquidity TERM 7 Avg. Days to Sell Inventory DEFINITION 7 365 / Inventory TurnoverLiquidity TERM 8 Debt Ratio DEFINITION 8 Total Liabilities / Total AssetsLeverage TERM 9 Debt-to-Equity Ratio DEFINITION 9 Total liabilities / total stockholder's equityLeverage TERM 10 Times interest earned ratio DEFINITION 10 Earnings before interest expense and income taxes / interest expenseLeverage TERM 21 (OI + FC) / (p-v) = Q can also be used to find what? DEFINITION 21 The Break Even quantity TERM 22 Margin of Safety DEFINITION 22 Sales Q - Break even Q TERM 23 Degree of Operating Leverage DEFINITION 23 CM / OI** Measures risk. This is based on Fixed Costs TERM 24 Contribution Margin Ratio DEFINITION 24 CM / Sales Rev TERM 25 Variable Costs Ratio DEFINITION 25 VC / Sales revenue TERM 26 CVP Graph = ? DEFINITION 26 Cost Volume Profit TERM 27 If OH is Underapplied... DEFINITION 27 Increase COGS TERM 28 If OH is Overapplied... DEFINITION 28 Decrease COGS TERM 29 4 Differences b/w managerial & financial accounting DEFINITION 29 Internal UseNo GAAPCan forecast for the futureCan do at any time, not just at the end of the period TERM 30 At what point are manufacturing costs expensed? DEFINITION 30 When finished goods are sold TERM 31 Period costs are associated with: DEFINITION 31 Selling of products, and the administration of the business