4财务管理专业英语.pptVIP

The number of days’ sales in inventory：存货周转天数 365 / inventory turnover 365÷ Cost of goods sold Average inventory Average inventory Cost of goods sold / 365 Accounts payable turnover ratio= 4.4.3 Accounts payable payment period= 4.4.3 4.3 Debt Management Ratios Debt management ratios characterize a firm in terms of the relative mix of debt and equity financing and provide measures of the long-term debt paying ability of the firm. 4.3 Debt Management Ratios Leverage ratios: * 4.3 Debt Management Ratios Coverage ratios: * 4.3.1 Debt Ratio Creditor prefer a low of moderate debt ratio because it provides more protection if the firm experiences financial problems. 4.3.1 Debt Ratio * 4.3.2 Long-term Debt Ratio Long-term debt ratio is computed by dividing a firm’s long-term debt, usually defined as all non-current liabilities, by its total assets. 4.3.2 Long-term Debt Ratio When computing the debt ratio and the long-term debt ratio, some managers and analysts use total capital in the denominator in place of total assets. 4.3.2 Long-term Debt Ratio Debt-to-total capital ratio = Total liabilities non-current liabilities + equity 4.3.2 Long-term Debt Ratio Long-term debt to total capital ratio = Long-term debt non-current liabilities + equity 4.3.2 Long-term Debt Ratio Leverage ratios characterize a firm in terms of its relative amount of debt financing, but they do not indicate the firm’s ability to meet its debt obligations. In fact, the possibility exists that a firm with a higher debt ratio could actually in a stronger position to service the firm’s debt due to stronger earnings and cash flows than a firm with a lower debt ratio and weaker earnings. 4.3.3 Interest Coverage Ratio The ratio measures the extent to which operating income can decline before the firm is unable to meet its annual interest cost. 4.3.3 Interest Coverage Ratio Note that earnings before interest and taxes, rather than net income, is