Income Statement Ratios Are Also Known As

The current ratio also known as the working capital ratio measures the capability of a business to meet its short term obligations that are due within a year.

Income statement ratios are also known as. This guide will teach you to perform financial statement analysis of the income statement. Some of the most common ratios include gross margin profit margin operating margin and earnings per share. Accounting ratios also known as. Vertical analysis also called common size statements analysis.

On the income statement vertical analysis is a universal tool for measuring the firm s relative performance from year to year in terms of cost and profitability. Ratio 8 earnings per share. Also known as the profit and loss statement or the statement of revenue and expense the income statement primarily focuses on the company s revenues and expenses during a particular period. These ratios are derived from income statements.

Interest is found in the income statement but can also be calculated through the debt schedule. The ratio considers the weight of total current assets versus total current liabilities. This ratio is known as the quick ratio or the acid test. If a corporation has only common stock no preferred stock no securities convertible into common stock and the corporation had the same.

An income statement or profit and loss account also referred to as a profit and loss statement p l statement of profit or loss revenue statement statement of financial performance earnings statement statement of earnings operating statement or statement of operations is one of the financial statements of a company and shows the company s revenues and expenses during a particular period. Corporations with only common stock outstanding if a corporation s common stock is publicly traded the corporation must also report its net income after tax as earnings per share eps on the face of its income statement.