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ACCT 9-10 Ratios and Income Statement

ACCT 9-10 Ratios and Income Statement - 1 Ratio Analysis a...

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1) Ratio Analysis: a) Liquidity ratios b) Solvency Rations c) Profitability ratios d) Liquidity ability to survive in the short term i) Liquidity ratios: (1) Working capital = current assets – current liabilities (2) Current ratio = current assets / current liabilities ii) Solvency ability to survive over a long period of time (1) Solvency Ratios: (a) Debt to total asset ratio = (i) Total Debt (current and noncurrent liabilities) / Total assets (b) Free Cash Flow = cash provided by operating activities – capital expenditures – cash dividends paid iii) Profitability operating success of a company (1) Profitability ratio: (a) Earnings per share (EPS) = (i) (net income – preferred stock dividends) / average common shares outstanding 1. Ave. common shares outstanding = a. (last years ending shares + this years ending share) / 2 (ii) Higher value = improved performance 2) Primary accounting standard setting body in the U.S. a)
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  • Fall '07
  • BRUSH
  • Generally Accepted Accounting Principles, international Accounting standards Board, Accounting standards Board, step income statement, multiple-step income statement, Taxes =Net Income

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ACCT 9-10 Ratios and Income Statement - 1 Ratio Analysis a...

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