Accounting

• Short term Solvency - Liquidity

  1. current ratio = current assets / current liabilities
  2. turned into cash within a year
  3. higher =Better
• Long term Solvency Leverage Debt

  1. debt to Asset ratio: total liability / total assets
  2. lower = better
  3. debt to equity ratio: total liabilites/ total equity
  4. lower = better
• Profitability - Performance

  1. return on equity = net income/ total equity
  2. higher = better
• Activity (Efficiency) Assessment

  1. inventory turnover = cost of goods sold / average inventory
  2. higher = sold faster