chapter 3 continued
chapter 3 continued CIS 201-904
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This 1 page Bundle was uploaded by Hali Marie Harrison on Monday September 28, 2015. The Bundle belongs to CIS 201-904 at Missouri State University taught by Radhika Kaula in Fall 2015. Since its upload, it has received 27 views.
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Date Created: 09/28/15
Quantitative Analysis using numeric information to make decisions within the business Financial Ratios Ratios are divided into 3 groups Liquidity Ratios Debt Ratios Activity Ratios Liquidity Ratios measure the liquidity position of a business do they have enough money to pay for their obligations Working Captial Ratio Total Current Assets Total Current Liabilities Current Ratio Total Current Assets Total Current Liabilities Quick Ratio AKA AcideTest Ratio Total Current Assets Inventory Total Current Liabilities Debt Ratios measure the debt of a business Total Debt Ratio Total Liabilities Total Assets This ratio shows the of debt the business has compared to the assets Debt to Equity Ratio Total Liabilities Total Equity This ratio shows what debt is on the shoulders of the stockholders Activity Ratios provide information about operational efficiency Accounts Receivable Turnover Ratio Sales Accounts Receivable lnventory Turnover Ratio Sales Inventory Total Assets Turnover Ratio Sales Total Assets Managers use this ratio to take assets and turn them into inventory Cash Flow Analysis Cash Inflow cash coming in Ex selling goods and services issuing stocks and bonds interest earned etc Cash Outflow cash going out Ex paying bills paying employees Net Cash Flow Cash Inflows Cash Outflows Positive Cash Flow more inflow than outflow Good Negative Cash Flow more outflow than inflow Bad Cumulative Net Cash Flow CNCF the company s first months cumulative net cash flow is going to be the same as is current net cash flow For every month past that you have to add the previous months cumulative net cash flow to the current months net cash flow When CNCF is negative it will show up red or in parentheses
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