Ratios

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# Ratios - PowerPoint PPT Presentation

Who Cares?. Other Terms. Review Potpourri. Financial Reporting. Ratios. \$ 100. \$ 100. \$ 100. \$ 100. \$ 100. \$ 200. \$ 200. \$ 200. \$ 200. \$ 200. \$ 300. \$ 300. \$ 300. \$ 300. \$ 300. \$ 400. \$ 400. \$ 400. \$ 400. \$ 400. \$ 500. \$ 500. \$ 500. \$ 500. \$ 500. Ratios - \$100.

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Who Cares?

Other Terms

Review Potpourri

Financial Reporting

Ratios

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Ratios - \$100

Total Liabilities divided by Total Assets.

What is the Debt-to-Assets ratio?

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Ratios - \$200

Net Income divided by Sales Revenue.

What is the Net Profit Margin Ratio?

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Ratios - \$300

Sales Revenue divided by Average Total Assets.

What is the Asset Turnover Ratio?

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Ratios - \$400

Directional effect on the Net Profit Margin Ratio if expenses are decreased, everything else remaining the same.

What is Increase?

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Ratios - \$500

Directional effect on the Debt-to-Assets ratio if assets are purchased on credit (before the purchase the DTA ratio was greater than 1).

What is decrease?

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Financial Reporting - \$100

A visual representation of the components needed for financial misconduct to occur.

What is “The Fraud Triangle”?

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Financial Reporting - \$200

The name of the legislation introduced in 2002 intended to curb financial fraud.

What is the Sarbanes-Oxley Act of 2002?

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Financial Reporting - \$300

The three categories of the fraud triangle.

What is incentive, opportunity, and character (to rationalize)?

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Financial Reporting - \$400

Stronger internal controls are intended to reduce this aspect of the fraud triangle.

What is “opportunities”?

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Financial Reporting - \$500

This is the type of audit opinion indicates the financial statements are prepared in accordance with GAAP.

What in an Unqualified Audit Opinion?

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Who Cares? - \$100

This group of people use accounting information to run the business.

Who are managers?

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Who Cares? - \$200

______ elect ______ who oversee ______.

Who are stockholders, directors, and managers?

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Who Cares? - \$300

DAILY DOUBLE!!!

Who Cares? - \$400

This group of people use information in a governance roll.

Who are directors?

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Who Cares? - \$500

Terms in a loan-agreement (usually tied to some sort of accounting information) that, if broken, entitle the lender to immediate repayment or renegotiation.

What are Loan Covenants?

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Other Terms - \$100

A more comprehensive version of the Statement of Retained Earnings.

What is a Statement of Stockholders’ Equity?

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Other Terms - \$200

The type of income statement that includes more than one subtotal.

What is multistep income statement?

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Other Terms - \$300

The part of the financial statements where information is presented about the accounting policies used by a company.

What are Notes to the Financial Statements?

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Other Terms - \$400

The type of financial statements that includes more than one column.

What is comparative financial statements?

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Other Terms - \$500

The four key elements of most business models.

What are: obtain financing, invest in assets, generate revenues, and produce net income (p. 209)?

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Review Potpourri - \$100

Used to update the accounting records; relates to previously recorded transactions.

What are Deferral Adjustments?

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Review Potpourri - \$200

After all temporary accounts have been closed, the balance in the Retained Earnings account agrees with the number calculated on this financial statement.

What is the Statement of Retained Earnings?

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Review Potpourri - \$300

This account records the total amount of depreciation recorded against an asset since its purchase.

What is Accumulated Depreciation?

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Review Potpourri - \$400

An account that is offset to, or a reduction of, another account.

What is a Contra-Account?

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Review Potpourri - \$500

Accounts affected when you record the earning (but not the receipt) of interest.

What are Interest Receivable (asset, debited) and Interest Revenue (revenue, credited)?

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Daily Double
• Specify Your Wager!
Who Cares? ---

People who use accounting information to value the business.

Who are investors?

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