Ratio Analysis Liquidity Ratios Measure the shortterm ability
Ratio Analysis Liquidity Ratios Measure the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash. u Short-term creditors such as bankers and suppliers are particularly interested in assessing liquidity. u Ratios include the current ratio, the acid-test ratio, receivables turnover, and inventory turnover. Dr. Mohamed Mousa SO 5 Identify and compute ratios used in analyzing a firm’s liquidity, profitability, and solvency.
Ratio Analysis Profitability Ratios 9. Earnings Per Share (EPS) Illustration 18 -22 A measure of the net income earned on each share of common stock. Dr. Mohamed Mousa SO 5
Ratio Analysis Profitability Ratios 10. Price-Earnings Ratio Illustration 18 -23 Measures the net income earned on each share of common stock. Dr. Mohamed Mousa SO 5
Ratio Analysis Profitability Ratios 11. Payout Ratio Illustration 18 -24 Measures the percentage of earnings distributed in the form of cash dividends. Dr. Mohamed Mousa SO 5
Ratio Analysis Solvency Ratios Solvency ratios measure the ability of a company to survive over a long period of time. u Debt to Total Assets and u Times Interest Earned are two ratios that provide information about debt-paying ability. Dr. Mohamed Mousa SO 5 Identify and compute ratios used in analyzing a firm’s liquidity, profitability, and solvency.
Ratio Analysis Solvency Ratios 12. Debt to Total Assets Ratio Illustration 18 -25 Measures the percentage of the total assets that creditors provide. Dr. Mohamed Mousa SO 5
Ratio Analysis Solvency Ratios 13. Times Interest Earned Illustration 18 -26 Provides an indication of the company’s ability to meet interest payments as they come due. Dr. Mohamed Mousa SO 5
Ratio Analysis Summary of Ratios Illustration 18 -27 Dr. Mohamed Mousa SO 5
Summary of Ratios Illustration 18 -27 Dr. Mohamed Mousa SO 5
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