Red Company: Chapter 5

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Red Company: Chapter 5


Lecture number:
38
Pages:
2
Type:
Lecture Note
School:
Miami University, Oxford
Course:
Acc 221 - Intro to Financial Accounting
Edition:
1
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Lecture 38 Outline of Previous 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 o 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 ACC 221 1st Edition



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