Quiz for Media Economics-J771

Estimated # of times inventory is used & replenished during a period.
(COGS/Average Inventory)

-High = best
---Add. expenses incurred when they stay in company’s possession for an extended period of time
---Industry specific

Indicate solvency, or the ease w/ which an asset can be converted to cash. A liquid company owns enough assets to cover its obligations.

Compares operating income of company to sales for a given period; examines relationship b/w management-controllable costs & sales before taxes, interest & non-operating expenses.
(Operating Margin = Operating Income/Sales)

-High margin & stable over time = best

Analyzes a company's gross income compared to its sales for a given time period.
(Gross margin = [Sales-COGS]/Sales)

-High margin & stable over time = best
---Greater the company’s expected profitability

Indicates what proportion of firm's capital derived from debt as compared to equity.
(Long-term debt/Total common equity)

-Small = best
---High = increased volatility of earnings = higher probability that the firm will default on debt
---Long-term debts are liabilities due in a year or more

Compares operating income of company to sales for a given period; examines relationship b/w management-controllable costs & sales before taxes, interest & non-operating expenses.
(Operating Margin = Operating Income/Sales)

-High margin & stable over time = best

Measure how well a company manages what they own.

-Required formula pieces found on balance sheet w/ exception of sales & cost of goods sold, which are found on income statement
- Expressed as #'s carried to 2decimal places

Analyzes a company's gross income compared to its sales for a given time period.
(Gross margin = [Sales-COGS]/Sales)

-High margin & stable over time = best
---Greater the company’s expected profitability

-Media needs advertising to be able to function; can’t have one w/o the other

Indicate solvency, or the ease w/ which an asset can be converted to cash. A liquid company owns enough assets to cover its obligations.

Compares operating income of company to sales for a given period; examines relationship b/w management-controllable costs & sales before taxes, interest & non-operating expenses.
(Operating Margin = Operating Income/Sales)

-High margin & stable over time = best

Measures % of assets financed by all debt types; both for current & long-term.
(Total liabilities/Total assets)

-Small = better
---Higher = greater the potential variability of earnings = greater likelihood for firm to default on obligations.

Assess a business' ability to generate earnings in comparison w/ expenses as well as other relevant costs incurred during a given time period.

- Expressed as % carried to 2 decimal places
- Formula parts found on company’s income statement

Compares operating income of company to sales for a given period; examines relationship b/w management-controllable costs & sales before taxes, interest & non-operating expenses.
(Operating Margin = Operating Income/Sales)

-High margin & stable over time = best

Compares a firm's current assets to its current liabilities.
(Current ratio = Current assets/Current liabilities)

-# carried to 2 decimal places
-Higher = better
---More liquid
---Less risk of financial trouble
-Too high of a # can indicate bad things:
---Unnecessary investment in current assets
---Inability to collect on accounts receivables
---Inability to meet current liabilities

Estimated # of times inventory is used & replenished during a period.
(COGS/Average Inventory)

-High = best
---Add. expenses incurred when they stay in company’s possession for an extended period of time
---Industry specific

Measures % of assets financed by all debt types; both for current & long-term.
(Total liabilities/Total assets)

-Small = better
---Higher = greater the potential variability of earnings = greater likelihood for firm to default on obligations.

Measure how well a company manages what they own.

-Required formula pieces found on balance sheet w/ exception of sales & cost of goods sold, which are found on income statement
- Expressed as #'s carried to 2decimal places

Estimated # of times inventory is used & replenished during a period.
(COGS/Average Inventory)

-High = best
---Add. expenses incurred when they stay in company’s possession for an extended period of time
---Industry specific

Compares operating income of company to sales for a given period; examines relationship b/w management-controllable costs & sales before taxes, interest & non-operating expenses.
(Operating Margin = Operating Income/Sales)

-High margin & stable over time = best

Analyzes a company's gross income compared to its sales for a given time period.
(Gross margin = [Sales-COGS]/Sales)

-High margin & stable over time = best
---Greater the company’s expected profitability

Compares operating income of company to sales for a given period; examines relationship b/w management-controllable costs & sales before taxes, interest & non-operating expenses.
(Operating Margin = Operating Income/Sales)

-High margin & stable over time = best

Measures % of assets financed by all debt types; both for current & long-term.
(Total liabilities/Total assets)

-Small = better
---Higher = greater the potential variability of earnings = greater likelihood for firm to default on obligations.

Measure how well the company's assets generated sales for the period.
[Sales/Average total assets = (latest fiscal period + preceding fiscal period)/2]

-Too low # = low productivity levels
-Too high # = insufficient assets for growth & sales generation

Estimated # of times inventory is used & replenished during a period.
(COGS/Average Inventory)

-High = best
---Add. expenses incurred when they stay in company’s possession for an extended period of time
---Industry specific

Indicate solvency, or the ease w/ which an asset can be converted to cash. A liquid company owns enough assets to cover its obligations.

Measure how well the company's assets generated sales for the period.
[Sales/Average total assets = (latest fiscal period + preceding fiscal period)/2]

-Too low # = low productivity levels
-Too high # = insufficient assets for growth & sales generation

Indicates firm's short-term liquidity; excludes inventory & less liquid assets.
([Cash + Marketable securities + Accounts receivable]/Current liabilities)

-# carried to 2 decimal places
-Required pieces for the formula can be found on balance sheet
-Higher = better
---more liquid