Advanced Accounting Chapter 13 Review

Current Assets = 399,000 ; Current Liabilities = 194,000. Current Ratio is

Short-term, liquid investments that are readily convertible to cash and which mature in three months or less

Market ratios tie together the financial statements and the stock market

If beginning and ending balances are shown, ending balance for one period equals beginning balance for the prior period

If a company's inventory turnover decreases, the company is taking fewer days to sell its inventory

Net Income=79,800 ; Income from Ops=104,000 ; Gross Profit=315,600 ; Net Sales=853,000. Operating Margin is:

Current Assets=512,000 ; Quick Assets=203,800; Current Liabilities=278,000 ; Total Liabilities=330,000. Quick Ratio is:

One way a company can increase its current ratio is by increasing short term liabilities

If a company's interest coverage ratio is too low, it runs the risk of not being able to pay its annual interest expense

Net income after federal income tax divided by the number of outstanding shares of stock

Net Income=79,800 ; Income from Ops=104,000 ; Gross Profit=315,600 ; Net Sales=853,000. Gross Margin is:

If your account receivable turnover ratio increases, you're collecting your accounts receivables in fewer days

Price-earnings ratios vary from industry to industry

If your assets increase, your debt ratio will also increase

The number of times a company can cover its interest expense with its earnings

Earnings before interest expense and taxes

Gross profit as a percent of net sales

A ratio that measures the relationship of quick assets to current liabilities

Current Assets = 512,000 Current Liabilities = 278,000. Working Capital is: