Summary Wall Street Prep Accounting Exam 2023 Study Guide

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Liquidity Ratios - Correct Answer measures of a firm's short-term ability to meet its current obligations Profitability Ratios - Correct Answer measures of a firm's profitability relative to its as... sets (operating efficiency) and to its revenue (operating profitability) Activity Ratios - Correct Answer Measure of efficiency of a firm's assets Solvency Ratios - Correct Answer Measure of a firm's ability to pay its obligations Inventory Turnover - Correct Answer COGS / avg inventory Receivables Turnover - Correct Answer revenue / average accounts receivable DSO (Days Sales Outstanding) - Correct Answer AR/Credit Sales * days in period days in period/receivables turnover A/P turnover - Correct Answer COGS / Average A/P PPP (payables purchasing period) - Correct Answer days in period/ Accounts payable turnover Current Ratio - Correct Answer current assets/current liabilities Quick ratio (acid test) - Correct Answer Cash and AR divided by current liabilities Gross profit margin - Correct Answer gross profit/revenue operating margin - Correct Answer operating profit/revenue net profit margin - Correct Answer net income/revenue asset turnover - Correct Answer revenue/ average assets return on assets (ROA) - Correct Answer Net Income / Average Assets return on equity (ROE) - Correct Answer net income/ total equity Basic EPS - Correct Answer (Net Income - Preferred Dividends)/(Weighted Average of Shares Outstanding) Diluted EPS - Correct Answer diluted net income / weighted average diluted shares outstanding [Show More]

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