ACCTG300 Lecture Notes - Lecture 11: Current Liability, Weighted Arithmetic Mean, Accounting Information System

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Financial ratio classi cations pro tability ratios measure the earnings or operating success of a company for a given period of time. Ratios liquidity ratios measure the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash solvency ratios measure the ability of a company to survive over a long period of time. Financial ratios one way to gauge the performance of a company measures that express the relationship or interrelationship between, or among, two or more. Solvency ratio - debt to total assets debt to total asset ratio = total liabilities total assets whether a company can pay off its liabilities as they become due benchmark - lower is better than higher. 365 days inventory turnover ratio days in inventory indicates the overage period required to sell an item of inventory lower is better than higher. Age of accounts receivable (average collection period) age of accounts receivable =

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