Term
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Definition
current assets/current liabilities
Short term debt paying ability. |
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Term
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Definition
(cash + short term investments + current receivables)/current liabilities
Immediate short term debt paying ability. |
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Term
| Accounts receivable turnover |
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Definition
net sales/average accounts receivable, net
Efficiency of collection. |
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Term
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Definition
cost of goods sold/average inventory
Efficiency of inventory management. |
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Term
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Definition
account receivables/net sales *365
Liquidity of receivables. |
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Term
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Definition
ending inventory/cost of goods sold *365
Liquidity of inventory. |
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Term
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Definition
net sales/average total assets
Efficiency of assets in producing sales. |
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Term
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Definition
total liabilities/total assets
Creditor financing and leverage. |
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Term
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Definition
total equity/total assets
Owner financing |
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Term
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Definition
total liabilities/total equity
Debt versus equity financing. |
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Term
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Definition
income before interest expense and income taxes/interest expense
Protection in meeting interest payments. |
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Term
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Definition
net income/net sales
Net income per sales dollar. |
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Term
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Definition
(net sales - cost of goods sold)/net sales
Gross margin per sales dollar. |
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Term
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Definition
net income/average total assets
Overall profitability of assets. |
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Term
| Return on common stockholder's equity |
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Definition
(net income-preferred dividends)/average common stockholder's equity
Profitability of owner investment. |
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Term
| Book value per common share |
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Definition
shareholder's equity applicable to common shares/number of common shares outstanding
Liquidation at reported amounts. |
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Term
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Definition
(net income - preferred dividends)/weighted average common shares outstanding
Net income per common share. |
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Term
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Definition
market price per common share/earnings per share
Market value relative to earnings. |
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Term
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Definition
annual cash dividends per share/market price per share
Cash return per common share. |
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