ACC 221 1st Edition Lecture 38 Outline of Last Lecture Section 37 Red Company Chapter 4 Chapter 4 o Profitability o Cost of goods sold o Efficiency o Leverage o Interest Coverage Outline of Current Lecture Section 38 Red Company Chapter 5 Chapter 5 o Liquidity indicators o Statement of cash flow indicators o Equity investor indicators Current Lecture Section 38 Red Company Chapter 5 Chapter 5 Liquidity indicators Working capital Current assets current liabilities working capital Better if higher Current Ratio Current assets current liabilities Better if higher Quick Ratio Cash cash equivalents short term investments accounts receivable net Better if higher o Statement of cash flows indicators Cash flow to net income ratio Net cash provided by operating activities net income May be better if higher or lower Cash flow to capital expenditures ratio Net cash provided by operating activities net cash paid to purchase property plant and equipment Better if higher Free cash flow o These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute o Net cash provided by operating activities net cash paid to purchase prop plant equip cash dividends paid Better if higher Equity investor indicators Earnings per share Net income dividends on preferred stock average number of common shares outstanding Better if higher Dividend payout Total cash dividends declared net income Better if higher or lower depending Price earnings ratio Year end closing market price of 1 common share earnings per share Better if higher or lower depending Dividend yield Cash dividend per common share for the year year end closing market price of 1 common share Better if higher or lower depending
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