Flashcard: Financial Analysis and Management — 22 carte

Profitability — definition?

A firm's ability to earn a profit.

Liquidity — role?

Meet short-term obligations promptly.

Efficiency — function?

Utilize assets productively for income.

Stability — meaning?

Financial strength and resilience.

Financial statements — purpose?

Quantify a firm’s financial health.

Income statement — focus?

Operational results over a period.

Balance sheet — snapshot?

Assets, liabilities, equity at a point.

Cash flow statement — summary?

Changes in cash over time.

Financial statements — assess?

Performance, position, cash flows.

Net sales — calculation?

Gross sales minus returns/discounts.

Cost of sales — includes?

Direct production or delivery costs.

Profit margin — ratio?

Net income divided by net sales.

P/E ratio — purpose?

Market expectation of growth.

Balance sheet structure?

Assets, liabilities, owners’ equity.

Current assets — examples?

Cash, receivables, inventories.

Current liabilities — examples?

Payables, accrued expenses.

Working capital — formula?

Current assets minus current liabilities.

Overall debt ratio — measure?

Debt as a proportion of assets.

Multiyear analysis — benefit?

Identify long-term trends.

Financial health indicators?

Profitability, liquidity, stability metrics.

Liquidity ratios — include?

Current ratio, working capital.

Asset/liability management — goal?

Balance assets and liabilities for stability.