ADMS 3585 Study Guide - Debt Service Coverage Ratio, Free Cash Flow, Current Liability

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Balance sheet: usefulness: also known as statement of financial position, the balance sheet provides information: for evaluating the capital structure and for computing rates of return on invested assets. It is also useful for assessing an enterprise"s: liquidity (time until asset is realized or liability has to be paid, solvency (ability to pay debts and related interest, financial flexibility (ability to respond to unexpected needs and opportunities) Liquidity: current ratio, quick ratio, working capital. = current assets current liabilities: combining with statement of cash flow, current cash debt coverage ratio = Coverage ratios: debt to assets, debt to equity: Flexibility: combining with statement of cash flow, cash debt coverage ratio = Currentassetscurrentliabilities,ec,cashmarketablesuritiesnetreceivablesaveragecurrentliabilitiestotaldebttotalassets"totaldebtshareholdersequity calculated as net cash from operations less capital expenditures and dividends. Balance sheet: limitations: many assets and liabilities are stated at historical cost. Individual balance sheet items should be: reported separately, and in. Allow users to assess amounts, timing, and uncertainty of future cash flows.

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