
Financial Analysis Flashcard
Flashcard
•
Mathematics
•
University
•
Hard
Wayground Content
FREE Resource
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15 questions
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1.
FLASHCARD QUESTION
Front
What is the Net Profit Ratio?
Back
The Net Profit Ratio is a financial metric that assesses a company's profitability after all expenses have been deducted from total revenue. It is calculated as Net Profit divided by Total Revenue.
2.
FLASHCARD QUESTION
Front
What does a high Interest Coverage Ratio indicate?
Back
A high Interest Coverage Ratio suggests that a company has a strong ability to pay its interest obligations, indicating lower financial risk.
3.
FLASHCARD QUESTION
Front
What does a high Inventory Turnover Ratio signify?
Back
A high Inventory Turnover Ratio signifies efficient inventory management, meaning the company is selling and replacing its inventory quickly.
4.
FLASHCARD QUESTION
Front
What is the formula for the Creditors Turnover Ratio?
Back
The formula for the Creditors Turnover Ratio is Credit Purchases divided by Average Accounts Payable.
5.
FLASHCARD QUESTION
Front
What do Solvency Ratios measure?
Back
Solvency Ratios measure a company's ability to meet its long-term obligations, indicating financial stability.
6.
FLASHCARD QUESTION
Front
Define Gross Profit Ratio.
Back
The Gross Profit Ratio is a financial metric that shows the percentage of revenue that exceeds the cost of goods sold (COGS). It is calculated as Gross Profit divided by Total Revenue.
7.
FLASHCARD QUESTION
Front
What is the significance of Current Ratio?
Back
The Current Ratio measures a company's ability to pay short-term obligations with its current assets. A ratio above 1 indicates that the company has more current assets than current liabilities.
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