FINANCIAL RATIOS

Front

A comparison between two numbers showing how many times one number exceeds the other.

Back

ratio

Front

Financial ratios that tell how well a company can pay off its short-term debts and meet unexpected needs for cash.

Back

liquidity ratios

Front

Financial ratios that indicate how effectively a company uses its resources to generate sales.

Back

efficiency ratios

Front

Financial ratios that show how and to what degree a company has financed its assets.

Back

leverage ratios

Front

Financial ratios that tell how much of each dollar of sales, assets, and owner's investments resulted in net profit.

Back

profitability ratios

Front

The difference between current assets and current liabilities at a point in time. The amount of money that would be left over if all the current liabilities were paid off by current assets.

Back

working capital

Front

The comparison of a firm's current assets to current liabilities. The ratio indicates the amount of current assets available to pay off $1 of current debt.

Back

current ratio

Front

Indicates a firm's ability to quickly liquidate assets to pay off current debts.

Back

acid test/ quick ratio

Front

Indicates the number of dollars in sales the firm generates from each dollar it has invested in assets.

Back

asset turnover ratio

Front

The number of times during an operating period that the average inventory was sold.

Back

inventory turnover