Unit_4_Financial_Statements___Ratio_Analysis

Financial Statements

Systematically organized summaries of the financial position and performance of a business.

Income Statement

A financial statement that shows the company’s revenues and expenses during a specific period.

Balance Sheet

A statement that summarizes a company's assets, liabilities, and equity at a specific point in time.

Trading Account

An account prepared to calculate the gross profit or loss from trading activities.

Gross Profit

Revenue from sales minus the cost of goods sold.

Net Profit

The remaining income after all expenses have been deducted from revenues.

Current Ratio

Asset/liability

Quick Ratio

cash+marketable securities+acc receivable/current liability

gross profit margin

(Gross profit/ Revenue)x100

net profit margin

(Net income/total revenue) x 100

Return on asset

net income/ total asset

Return on equity ratio

Net income/ Shareholder equity

inventory Turnover ratio

cost of goods sold/ average inventory

Receivable turnover ratio

Credit sale/ Receivables

debt to equity ratio

short term debt+ long term debt + other fixed payments/Shareholder equity

debt to asset ratio

short term debt+ long term debt/ Total assets