ENTR 3P96 Chapter Notes - Chapter 5: Interest Expense, Gross Margin, Quick Ratio
16 Feb 2012
School
Department
Course
Professor
Document Summary
Understand important financial performance measures and their users, by life cycle stage. Describe how financial ratios are used to monitor a venture s performance. Identify specific cash burn rate measures and liquidity ratios and explain how they are calculated and - used by an entrepreneur. Identify and describe the use and value of conversion period ratios to the entrepreneur. Identify specific leverage ratios and explain their usage by lenders and creditors. Identify and describe measures of profitability and efficiency that are important to the entrepreneur and equity investors. Financial ratios: show the relationship between two or more financial variables. Trend analysis: used to examine a venture s performance over time. Cross-sectional analysis: used to compare a venture s performance against another firm at the same point in time. Industry comparables analysis: used to compare a venture s performance against the average performance in the same industry.
