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10 Cards in this Set
- Front
- Back
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CURRENT RATION |
Provides the measure of the short-term solvency of the firm |
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PRICE-EARNINGS RATIO (PE) |
=P/EPS The market price per share of common stock divided by the earnings per share of common stock. -A corporation with a high price earnings ratio is expected to have above average increases in its future earnings per share. |
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MARKET VALUE OF AN ASSET |
What an item is actually worth if sold and must always be a positive value |
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MARGINAL TAX RATE |
The tax rate payable on the next dollar earned and, due to deductions and credits, the marginal tax rate is ALWAYS HIGHER than the Average Tax Rate |
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TOTAL ASSET TURNOVER |
=Sales/Assets How much in sales is generated by each dollar of firm assets |
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TIMES INTEREST EARNER or INTEREST COVERAGE RATIO |
Relative measure of how well the firm's operating earnings can cover the current interest obligations |
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QQQ- Are Companies required by law to have their bonds rated by agencies like Moody's? |
No. |
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THE FISHER EFFECT |
Relationship between nominal returns, real returns, and inflation |
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QQQ- Do investors require higher yields on unsecured bonds than on secured bonds? |
YES |
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CONVERTIBLE BONDS |
Can be swapped for a fixed number of shares of stock before maturity at the holder's option |
