4_20 Finance Ratios Notes_

Liquidity

an asset can be converted into cash without affecting the market price.

Fundamental Analysis

examining company's financial statements.

Technical Analysis

analyzing patterns and trends in the stock price movement.

Net Income

profit earned after all deductions

Return On Equity Ratio

Net Income / Shareholder Equity

PEG Ratio

PE Growth / EPS Growth

Current Ratio

Current Assests / Current Liabilities

Liquidity

asset can be converted into cash without affecting market price

Cost Of Goods Sold

money spend on the sold goods by company

Net Income

profit earned after all deductions

Gross Income

profit earned before all deductions.

Current Assets

expected to be converted into cash within one year or within the normal operating business cycle. These assets include cash and cash equivalents, accounts receivable, inventory, and prepaid expenses.

Balance Sheet

what a company owes/owns at a fixed amount in time. It can be written anytime.

Income Statement

a financial statement that reports a company's revenues, expenses, and net income over a specific period of time. It provides a summary of a company's financial performance and is used to assess its profitability.

Balance Sheet Equation

Assets = Liabilities + Owners Equity

Income Statement Equation

Revenue - Expenses = Income

EPS Equation

(Profit - Dividends) / # of shares outstanding

Cash Flow Statement

a financial statement that shows the inflows and outflows of cash and cash equivalents during a specific period of time.

Current Assets Equation

Current Assets / Current Liabilities

Accounting Receivables

amount of money owed to a company by its customers for goods or services that have been sold on credit. It is considered an asset because the company expects to receive from its customers in the future.