Exam (elaborations)
ACG Ratios (1).
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Exam of 2 pages for the course ACG 201 at ACG 201 (ACG Ratios (1).)
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ACG RatiosAcid-Test Ratio - ANS-cash+short term investments+current receivables/current liabilities
Current Ratio - ANS-Current Assets/Current Liabilities (liquidity ratio)
Working Capital Formula - ANS-current assets-current liabilities
Accs Receivable turnover ratio - ANS-Net Sales/Avg Accs receivable, net
Inventory Turnover - ANS-COGS/Average Inventory
Days' Sales Uncollected - ANS-Accs Receivable, net/Net Sales * 365
Days' Sales in Inventory - ANS-EI/COGS * 365 (liquidity ratio)
Profit Margin Ratio - ANS-Net Income/Net Sales
Times Interest Earned - ANS-Income before int. expense and income taxes/interest expense
Return on Stockholder's Equity (ROE) - ANS-Net Income-preferred dividends/avg common
stockholder's equity
Price-Earnings Ratio - ANS-market price per share/earnings per share
Dividend yield ratio - ANS-annual cash dividends per share/market price per share
Return on Assets (ROA) - ANS-net income/average total assets
What are the building blocks of analysis? - ANS-Liquidity & Efficiency, solvency, profitability,
market prospects
List the general purpose financial statements. - ANS-1. Income statement 2. Balance sheet 3.
Statement of stockholder's equity 4. Statement of cash flows 5. Notes to the financial statement
What is accrual accounting? - ANS-Revenues are recorded when products or services are
delivered, and expenses are recorded when they are incurred.
Inventory Formula - ANS-Beginning inventory+Purchases=COGS
GAFS - ANS-BI+P
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