Ratio analysis

3. the ability of a firm to pay its bills on time, and how quickly a firm converts its liquid assets into cash
6. assess the firm's liquidity by dividing current liabilities into current assets
11. the number of days it takes to collect the average debt
13. assets it determines the amount of profit produced on a firm's assets by relating net profit plus interest expenses to total assets
14. interest paid on firm's outstanding debt.
15. the ability of an entity to pay its debts
16. a numerical approach to investigating accounts by comparing two related figures
17. it indicates the accounting rate of return on the shareholders' investment

1. the operating profit of a business as a percentage of the total amount of money used to generate it
2. similar to current ratio but excludes inventories from current assets
4. margin shows the firm's ability to control overheads and expresses net profit before tax as a percentage of turnover
5. Concept of comparing similar firms
7. shareholders' investment in the firm and the cumulative profits retained in the business up to the date of the balance sheet
8. the number of times in a trading year a firm sells the value if its inventories
9. the profit in relation to sales, capital or similar factors
10. expresses gross profit as a percentage of turnover
12. it indicates how much debt is used to finance a firm's assets