Acct: HTMW Financial Analysis

Just like we all care about our personal health, managers and investors care about the health of their company. How can they perform a “check-up” on their business in order to determine its progress and financial health?

• Financial Analysis

• Government Regulations

• Listen to FOXnews Business

• Just ask Owen

What Financial Analysis metric is this equation: (sales – cost of goods sold) / sales

• Current Ratio

• Gross Margin

• Interest Coverage

• Debt-to-Equity

looks at how much long-term debt a business is holding relative to other accounts and the amount of interest expense a firm is shelling out every year.

• Profitability

• Liquidity

• Solvency

• Regulation

gets right down to the most important detail—what amount of our sales are we able to take to the bottom line?

• Gross Margin

• Operating Margin

• Net Margin

• Quick Ratio

Answer explanation

What Ratio: cash and cash equivalents / current liabilities

• Current Ratio

• Quick Ratio

• Solvency Ratio

• PE Ratio

T or F: The most useful thing we can do is compare debt/equity ratios across an industry

• True

• False

Concerning the Interest Coverage Ratio: The higher the ratio, the more comfortably we are managing our interest.

• True

• False

What Ratio: ?? = current assets / current liabilities

• Quick Ratio

• EPS Ratio

• Current Ratio

• Operating Margin

What category of financial analysis: examine what’s left over after paying off expenses.

• Solvency

• Liquidity

• Regulatory

• Profitability

What financial analysis category: mainly concerned with the strength of a company’s balance sheet.

• Liquidity

• Solvency

• Profitability

• Regulatory