Lecture_Notes_-_Assign_10

Less increase in current assets and decrease in

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Less increase in current assets and decrease in current liabilities Add depreciation and losses Subtract gains 2. Investing Subtract purchase cost of fixed assets/investments Add sales price of fixed assets/investments 3. Financing Add issue price of bonds/stocks Subtract redemption of bonds Subtract interest/dividends paid Dividends paid = beginning dividends + declared dividends – ending dividends The total of these three categories will equal the change in cash.
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Chapter 15 Ratios Solvency – Ability to pay debt 1. Working capital = current assets – current liabilities Should be positive 2. Current ratio = current assets – current liabilities Should be greater than 1 3. Quick ratio = quick assets – current liabilities Quick assets are current assets less inventory and prepaids Accounts Receivable Analysis- Ability to collect cash 3. Accounts receivable turnover = net sales/average accounts receivable average accounts receivable = (begin A/R + ending A/R)/2 Should be:
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