accounting exam #2

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Gross profit percentage

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Accounting

31 Terms

1

Gross profit percentage

Gross profit on sales / Net sales

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2

Return on sales

Net income / Net sales

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3

Asset turnover

Net sales / Average total assets

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4

Return on assets

Net income / Average total assets

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5

Return on equity

Net income / Average stockholders equity

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6

Working capital

Current assets - Current liabilities

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7

Current ratio

Current assets / Current liabilities

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8

Quick ratio

(Cash + Short-term involvements + Accounts receivable) / Current liabilities

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9

Operating-cash-flow-to-current-liabilities ratio

Cash flow from operating activities / Average current liabilities

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10

Accounts receivable turnover

Net sales / Average accounts receivable

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11

Average collection period

365 / Accounts receivable turnover

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12

Inventory turnover

Cost of goods sold / Average inventory

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13

Days’ sales in inventory

365 / Inventory turnover

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14

Debt-to-equity ratio

Total liabilities / Total stockholders’ equity

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15

Times-interest-earned ratio

Income before interest expense and income taxes / Interest expense

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16

Operating-cash-flow-to-capital-expenditures ratio

Cash flow from operating activities / Annual net capital expenditures

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17

Earnings per share

(Net income - Stock dividends) / Weighted-average number of common shares outstanding

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18

Price-earnings ratio

Market price per share / Earnings per share

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19

Dividend yield

Annual dividend per share / Market price per share

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20

Dividend payout ratio

Annual dividend per share / Earnings per share

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21

Straight-line depreciation rate

100% / Expected useful life in years

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22

Double-declining balance depreciation rate

(100% / Expected useful life in years) x 2

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23

Annual depreciation

Book value at beginning of year x Double-declining balance rate

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24

Book value

Acquisition cost - accumulated depreciation

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25

Depreciation per unit

(Acquisition cost - Salvage value) / Total estimated units of production

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26

Annual depreciation

Depreciation per unit x Units of production for the period

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27

Impairment loss

Assets current book value - Current fair value

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28

Depletion rate

(Cost of natural resource - Salvage) / Estimated total units of natural resource

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29

Depreciation (Straight-line method)

(Asset cost - Salvage value) / Useful life

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30

Interest

Principal x Rate x Time(days/360)

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31

Gross profit

(Revenue - COGS) / Revenue

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