The issued shares of common stock minus the shares of treasury stock. The weighted average of the outstanding shares is used to compute the earnings per share.
The issued shares of common stock minus the shares of treasury stock. The weighted average of the outstanding shares is used to compute the earnings per share.
This financial statistic is the net income of a corporation after income tax (less any preferred dividends) divided by the weighted average number of shares of common stock outstanding during the same period of time.
The mathematical result of sales revenues divided by average total assets during the period of the sales.
The result of dividing a corporation’s net income by the average amount of common stockholders’ equity during the time interval when the net income was earned. To learn more about this ratio, see Explanation...
The amount of free cash flow divided by the weighted average number of common shares of stock outstanding during the year.
at $95,000 and ended at $105,000. The accounts receivable turnover ratio for the year was ______ times. Select... 8 10 12 15 View Coaching Let's refer to the receivables turnover ratio as RTR. RTR = net credit...
This indicates (on average) how many days of credit sales have not yet been collected. If the credit terms are net 30 days, you would expect this to be at least 30 days. To learn more, see Explanation of Financial...
What is the price earnings ratio? The price earnings ratio, or P/E ratio, is the market price per share of common stock divided by the earnings per share of common stock. A corporation with a high price earnings...
A corporation’s cost of capital is its weighted average after-tax cost of its debt, preferred stock, common stock, retained earnings, and other components of stockholders’ equity. The cost of capital is...
The average time it takes for a retailer’s or manufacturer’s inventory to turn to cash. If a manufacturer turns its inventory six times per year (every two months) and allows customers to pay in 30 days, its...
Our Explanation of Stockholders' Equity covers the unique terminology for a corporation's paid-in capital, retained earnings, treasury stock, and accumulated other comprehensive income. Included are cash dividends, stock...
Quiz for this topic. For more insight regarding a specific question, use the search box at the top of the page. 1. The ratio of current assets to current liabilites is the __________ ratio. 2. Collecting accounts...
sales will fluctuate as well. Therefore, you should view this as an average from the past. The calculation of the days’ sales in inventory is: the number of days in a year (365 or 360 days) divided by the inventory...
of earning the next dollar of taxable income. The marginal cost is important because a company’s fixed costs are unlikely to change when one more unit is produced or one additional unit of activity takes place....
How do you report a write-down in inventory? Definition of Write-down in Inventory Under FIFO and average cost methods, when the net realizable value of inventory is less than the cost of the inventory, there needs to be...
to COGS and the oldest unit costs will remain in inventory. Weighted-average which calculates a weighted-average unit cost based on each and all of the units in the COGA and then applies those unit costs to both the...
What is the cost of capital? Definition of Cost of Capital The cost of capital is the weighted-average, after-tax cost of a corporation’s long-term debt, preferred stock (if any), and the stockholders’ equity...
method) or Inventory (perpetual method) for the cost of the goods or merchandise received, and 2) credit a current liability account such as Accrued Liabilities. After the financial reporting for the accounting period...
What is a rolling budget? Definition of Rolling Budget A rolling budget often refers to a company’s operating budget which presents the future monthly budgets for the next 12 months. A rolling budget is also known as a...
stock is used? Select... Shares at the beginning of the year Average number of shares during the year Shares at the end of the year View Coaching Here are some key points: 1. A corporation's earnings (net income)...
receivable turnover ratio (or receivables turnover ratio) Average collection period (or days’ sales in accounts receivable) The accounts receivable turnover ratio is calculated by dividing a company’s net credit...
with operating cash, they should be classified as __________ liabilities. Select... current noncurrent 14. The cost of goods sold divided by average inventories during the period describes the inventory __________...
The financial ratio which indicates the speed at which a company collects its accounts receivable. If a company’s turnover is 10, this means the company’s accounts receivable are turning over 10 times per...
of direct labor hours or production __________ hours. 5. Under a perpetual accounting system, when a job is completed its cost is credited to the account work-in-process and is debited to the account with the title...
Perpetual only Both periodic and perpetual Neither periodic nor perpetual 23. To compute the amount of net sales, Sales is reduced by the amount of Sales Discounts and the amount of Sales __________ and Allowances. 24....
Our Explanation of Financial Statements provides you with the highlights of each of the five external financial statements issued by U.S. corporations. Our insights will give you a good understanding of what the...
Our Explanation of Working Capital and Liquidity provides you with an in-depth look at the components of working capital and the challenges of converting current assets to cash before obligations come due. You will see...
on entering a reasonable number of observations of the independent and dependent variables, regression software will compute the best fitting straight line (hence “linear”) that expresses the average relationship...
in which the general ledger income statement account Purchases is used for recording the purchases of goods that will be sold to customers. This account’s balance does not get reduced when goods are sold. With the...
What are turnover ratios? Definition of Turnover Ratios In accounting, turnover ratios are the financial ratios in which an annual income statement amount is divided by an average asset amount for the same year....
assumption such as 1) first-in, first-out or FIFO, 2) last-in, first-out or LIFO, 3) weighted average, etc. If LIFO is used, the company must disclose what the dollar amount of inventory would have been if FIFO had been...
and finished goods. The notes to the financial statements will also described how the manufacturer’s inventory is valued. For example, the notes will disclose whether FIFO lower of cost or net realizable value, LIFO,...
, the value of the collateral has dropped to less than $120,000 ($170,000 minus the 30% average drop in value), and a lot of houses are for sale with virtually no buyers. Join PRO to Track Progress Mark the Question as...
. Examples of ROI In the past, ROI was helpful for monitoring the decentralized divisions of large diverse corporations. The ROI calculation meant dividing division’s operating income by the average amount of operating...
on the preferred stock will appear on the corporation’s income statement as a subtraction from the corporation’s net income. This is necessary to report the earnings available for common stock. When the earnings...
products to a customer on credit, the company will become one of the customer’s __________. Select... secured creditors secured debtors unsecured creditors unsecured debtors 10. When calculating the inventory turnover...
Featured Review
"Since 2003 till present I've been working as a chief accountant and then CFO. So acounting principles, finance and controlling are already in my background. So why decide to take your online coaching? The reason is that I'm Italian and for my career I need to study once again everything in English, in order to be able to explain every finance and accounting subject fluently and with the most correct vocabulary. Your coaching is really rich of opportunities of learning in different ways (reading, videos, charts, tests and so on), it's always so clear in explanations and for my purpose I can say that I've found it extremely useful!! Thanks and good accounting to everybody." - Maria L.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviews
For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.
We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: