Financial Statement Basics

What financial statement lists all company accounts separated by category and excludes temporary accounts?

Balance Sheet

What is the formula for Return on Equity Ratio?

Net income / average stockholder's equity

What is the formula for Current Ratio / Working Capital Ratio?

Current assets / current liabilities

What is the formula for Cash Ratio?

(Cash + cash equivalents) / current liabilities

What financial statement shows how much money a company lost or earned over a set period?

Income Statement

What is the formula for Debt-to-Assets Ratio?

Total liabilities / total assets

What liquidity ratio focuses only on cash and cash equivalents?

Cash Ratio

What are assets that an organization may convert into cash within a year called?

Current Asset

What financial statement do we review to see the amount of a company's earnings retained for reinvestment?

Statement of Retained Earnings

What does the Return on Equity Ratio judge?

The return associated with money that shareholders have invested.

What are Financial Statement Ratios used for?

To judge how productive and efficient businesses are.

What term describes the rate at which an asset can be transformed into cash?

Liquidity

What does the Adjusted Trial Balance show?

All of a company's accounts after financial adjustments have been completed.

What is the formula for Acid / Quick Ratio?

(Cash & Cash Equivalents + Accounts Receivable) / Liabilities

What are Permanent Accounts?

Accounts that remain on the chart of accounts once opened.

What is the formula for Earnings per Share Ratio?

Net income / weighted average shares of outstanding common stock

What does the Debt-to-Assets Ratio indicate?

The amount of assets a company used debt to finance.

What does the Acid Ratio / Quick Ratio assess?

A company's ability to pay off short-term debts using liquid assets.

What does Earnings per Share Ratio (EPS) show?

The amount a company earns in net income for each share of its common stock.

What does the Current Ratio / Working Capital Ratio help determine?

The comparison of a company's current liabilities to its current assets.