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FNT1_Chap14 (18) - I Horngren Mozilla Firefox file Edit...

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Unformatted text preview: I: Horngren - Mozilla Firefox file Edit glow History fibekmarks Iools flelp i D httpliiwpscms.pearsoncmg.comiwpsimediaiobjectsifi?16i6877765ihha08_flash_maln.html?chapter=nuil&page=745&anchory=null&pstart=nuil& fin ' .3 v: 779923 Co nte nts } loom-rt: Receivable Thimwer Ratio {1). 758] Meaeules a company‘s abiiity to collect cash from CI'EGE ouster-rem. TD compute accounts receivable ilirnova, divifie net credit sales by average net accounts reoehrable. Benchmarking in. 1'52] The practice of comparing a company with other companies that are leaders. Gammon-Size Statement to. 751] A financial statement that reports only perv oentages (no dollar ai'nounts). Dividend Yield iF- 183} Ratio of dividends per share of stock to me stock's market price per share. Tails the percentage of a stock’s market value that the company returns to stockholders annu- ally as dividends. Dollar Value Bias (p. 751) The bias one sees from comparing num— bers in absolute (dollars) rather than relative (percentages) terms. Horizontal Analysis to. “Mar Study of percentage changes in cu‘npara- K’nre financial staterooms. Interest-Coverage Ratio (p. 1'59] Ratio or income from eperatronsto interest expense. Measures the number ol times that operating mrne can cover interest expense. Alec called the times-interest- earned ratio. Pricel'Eerningo Ratio in. 1'62) Ratio ol‘li'ie market price of ashare oi common stock to the company‘s eon-rings per share. Measures the value that the stock market pieces on $1 of a curripa'ly‘s earnings. Hate of Return on Net Sales in. 760) Ratio of not incarnate net sales. A measure of profitability. Also called return on sales. Return on sales In. 1'69: Ratio or net income to net sales. A measure Of Dmabilily. Also called rate 0‘ I’BWNI DI'I- net sales. 'I'irrres-Irrterest-Earned Ratio (p. 759] Ratio of income from operations to interest axoerise. Measures the number or times that operating firm can cover interest expense. Also called the interest» coverage mic. Trading on the Equity lp. 1'61] Earning more income on borrowed money than the related interest expense, thereby increasing the earnings for the owners of the business. Also called leverage. Trend Percentage: {13. 148] A form of horizontal analysis in which per- centages are com voted by selecting a base year as 100% and msing amounts for renewing years as a percent age of the base amount Vertical Analysis (p. 1‘49] Analysis oi a financial statement that reveals the relationship of sad: stahameot item to a specified base. which is the 100% Figure. Working Capital [11. 7E) Current assets minus CLIFBI‘IT liabilities. Meastres a business’s ability to meet its short-term obligations with its current 335915. ...
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