Basic ecomonic terminology. Искренко Э.В - 46 стр.

       14. Liquidity ratio — a ratio used to determine if a firm can pay
its current debts. Two ratios can be used to determine the liquidity
position of a firm: the current ratio and the quick ratio.
       15. Current ratio — a financial ratio that is computed by dividing
current assets by current liabilities.
       16. Acid-test (quick) ratio — a financial ratio that is calculated
by subtracting inventories from current assets and dividing the total
by current liabilities.
       17. Net profit margin — a financial ratio that is calculated by
dividing net income after taxes by net sales.
       18. Return on equity — a financial ratio that is calculated by
dividing net income after taxes by owners’ equity.
       19. Earnings per share — a financial ratio that is calculated by
dividing net income after taxes by the number of shares of common
stock outstanding.
       20. Working capital — the difference between current assets
and current liabilities.
       21. Activity ratio — a ratio that measures how effectively a
company uses its resources. (One of the examples is the inventory
turnover ratio.)
       22. Inventory turnover ratio — an important measure of
efficiency that is computed by dividing average inventory value by
cost of goods sold.
       23. Leverage — using borrowed funds to make purchases, thus
increasing the user’s purchasing power, potential rate of return,
and risk of loss.
       24. Leverage ratio — a ratio that measures the equity contribution
of stockholders as compared with the debt funds provided by a
firm’s creditors.
       25. Profitability ratio — a ratio used by management to determine
if a firm’s resources are being employed in the best manner.
       26. Accounts receivable turnover — a financial ratio that is
calculated by dividing net sales by accounts receivable; measures the
number of times a firm collects its accounts receivable in one year.
       27. Debt-to-assets ratio — a financial ratio that is calculated by
dividing total liabilities by total assets; indicates the extent to which
the firm’s borrowing is backed by its assets.
       28. Debt-to-equity ratio — a financial ratio that is calculated by
dividing total liabilities by owners’ equity; compares the amount of
financing provided by creditors with the amount provided by owners.
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