Finance/Accounting Functional Review. The Finance/Accounting Functions Defined Investment Decision The Allocation and Reallocation of Capital and Resources.

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Presentation transcript:

Finance/Accounting Functional Review

The Finance/Accounting Functions Defined Investment Decision The Allocation and Reallocation of Capital and Resources to Projects, Products, Assets, and Divisions of an Organization Investment Decision The Allocation and Reallocation of Capital and Resources to Projects, Products, Assets, and Divisions of an Organization

The Finance/Accounting Functions Defined (cont.) Financing Decision Determining the Best Capital Structure for a Firm: Evaluating Methods for Raising Capital Financing Decision Determining the Best Capital Structure for a Firm: Evaluating Methods for Raising Capital

Dividend Decision Concerns Issues Such as the Percentage of Earnings Paid to Stockholders, the Stability of Dividends Paid Over Time, and the Repurchase of Issuance of Stock Dividend Decision Concerns Issues Such as the Percentage of Earnings Paid to Stockholders, the Stability of Dividends Paid Over Time, and the Repurchase of Issuance of Stock The Finance/Accounting Functions Defined (cont.)

Basic Types of Financial Ratios Liquidity Ratios Leverage Ratios Efficiency Ratios Profitability Ratios Growth Ratios

Liquidity Ratios The Cash Ratio = The Quick Ratio = The Current Ratio =

Leverage Ratios The Debt Ratio = The Debt-to Equity Ratio = Equity Multiplier = Times Interest Earned Ratio =

Efficiency Ratios Inventory Turnover = Days Sales Outstanding = Sales per Employee =

Profitability Ratios Net Profit Margin = Return on Assets (ROA)= Return on Equity (ROE)= Gross Profit Margin =

Growth Ratios Sales = Annual % Growth in Total Sales Income = Annual % Growth in Profits Earnings Per Share = Annual % Growth in EPS Dividends Per Share =Annual % Growth in DPS Price-earning Ratio =

Analysis of Ratios Analyze Ratios over Time Compare with Industry Averages