Ratios: Cash Return on Assets definitions Flashcards
Ratios: Cash Return on Assets definitions
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Cash Return on Assets Efficiency metric showing operating cash flows generated per dollar of average total assets, typically expressed as a percentage. Operating Cash Flows Cash generated from core business activities, reported in the first section of the statement of cash flows. Average Total Assets Mean value calculated by adding beginning and ending total asset balances and dividing by two. Statement of Cash Flows Financial report detailing cash inflows and outflows from operating, investing, and financing activities. Net Income Profit remaining after all expenses, taxes, and costs are subtracted from total revenue. Investing Activities Section of the statement of cash flows reflecting cash used for or received from buying and selling long-term assets. Financing Activities Section of the statement of cash flows showing cash flows related to borrowing, repaying debt, and equity transactions. Efficiency Measure of how effectively a company uses its assets to generate cash from operations. Percentage Form Expression of a ratio by multiplying by 100, moving the decimal two places to the right. Red Flag Warning sign indicating potential financial trouble, such as negative operating cash flows. Net Cash Outflow Situation where cash payments exceed cash receipts during a period, resulting in negative cash flow. Numerator Top part of a ratio formula, representing the value being measured, such as operating cash flows. Denominator Bottom part of a ratio formula, representing the base value, such as average total assets. Asset Utilization Extent to which a company leverages its assets to generate cash or income.
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