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Financial Ratios Clicker Quiz What is this ratio - PowerPoint PPT Presentation


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Financial Ratios Clicker Quiz Market Price Per Share Earnings Per Share A. Inventory Turnover B. Accounts Receivable Turnover C. Price Earnings Ratio D. Debt to Equity What is this ratio? Public’s confidence in the future growth of the company Price Earnings Ratio Total Liabilities

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financial ratios

Financial Ratios

Clicker Quiz

what is this ratio

Market Price Per Share

  • Earnings Per Share
  • A. Inventory Turnover
  • B. Accounts Receivable Turnover
  • C. Price Earnings Ratio
  • D. Debt to Equity
What is this ratio?
what is this ratio4

Total Liabilities

  • Stockholder’s Equity
  • A. Inventory Turnover
  • B. Accounts Receivable Turnover
  • C. Price Earnings Ratio
  • D. Debt to Equity
What is this ratio?
debt to equity ratio

Proportions of debt to equity

  • Stockholders like it more than 1 since they will have more control
  • Creditors would like it less than 1 since the company is financed more by owners than creditors
Debt to Equity Ratio
what is this ratio6

Cost of Goods Sold

  • Average inventory
  • A. Inventory Turnover
  • B. Accounts Receivable Turnover
  • C. Price Earnings Ratio
  • D. Debt to Equity
What is this ratio?
inventory turnover

How many times inventory has been bought and sold during the year.

  • 4.0 Times would mean it is sold once a quarter. 12 times is once a month
Inventory Turnover
what is this ratio8

Sales on Account

  • Average Accounts Receivable
  • A. Inventory Turnover
  • B. Accounts Receivable Turnover
  • C. Price Earnings Ratio
  • D. Debt to Equity
What is this ratio?
what ratio is this

Dividends Per Share

  • Market Price Per Share
  • A. Return on Assets
  • B. Dividend Payout
  • C. Return on Equity
  • D. Dividend Yield
What ratio is this?
what is the ratio

Dividends Per Share

  • Earnings Per Share
  • A. Return on Assets
  • B. Dividend Payout
  • C. Return on Equity
  • D. Dividend Yield
What is the ratio?
dividend payout ratio

Portion of current earnings being paid out in dividends. Investors for dividends want this to be a large %. Investors seeking market price increase would like it to be small.

Dividend Payout Ratio
what is the ratio14

Net Income

  • Average Total Assets
  • A. Return on Assets
  • B. Dividend Payout
  • C. Return on Equity
  • D. Dividend Yield
What is the ratio?
return on assets

How well the managers are using the assets to produce income

  • We are ignoring the difference in comparable companies loans to buy the assets
Return on Assets
what is this ratio16

Net Income

  • Average Stockholder’s Equity
  • A. Return on Assets
  • B. Dividend Payout
  • C. Return on Equity
  • D. Dividend Yield
What is this ratio?
what is the ratio18

Current Assets – Current Liabilities

  • A. Current Ratio
  • B. Book Value
  • C. Quick Ratio
  • D. Working Capital
What is the ratio?
working capital

Excess of current assets to current liabilities. Shouldn’t have too much because you are not making your money work for you or you might have borrowed too much and are paying too much interest.

Working Capital
what is the ratio20

Cash, Marketable Securities, A/R, Short N/R

  • Current Liabilities
  • A. Current Ratio
  • B. Book Value
  • C. Quick Ratio
  • D. Working Capital
What is the ratio?
acid test quick ratio

Should be more than 1. Measures a company’s ability to meet obligations without having to liquidate inventory.

Acid Test (Quick) Ratio
what is the ratio22

Current Assets

  • Current Liabilities
  • A. Current Ratio
  • B. Book Value
  • C. Quick Ratio
  • D. Working Capital
What is the ratio?
what is the ratio24

Common Stockholder’s Equity

  • # of Common Shares Outstanding
  • A. Current Ratio
  • B. Book Value
  • C. Quick Ratio
  • D. Working Capital
What is the ratio?
book value per share

Amount to be distributed to holders of each share of common stock if all assets were sold at their balance sheet carrying amounts after all creditors were paid off.

  • Does not equal market value.
  • Market Value represents future whereas book value represents historical
Book Value Per Share
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