D076 WGU Unit 4 QUESTIONS AND ANSWERS 100%

Accounts Receivable Turnover - An activity ratio found by credit sales divided by accounts receivable. Activity Ratios - A category of ratios that measure how well a company uses its assets to generate sales or cash, showing the firm's operational efficiency and profitability. Average Collection Period - An activity ratio found by the number of days in a year (365) divided by AR turnover. Benchmarking - The process of completing a financial analysis to compare a firm's financial performance to that of other similar firms. Cross Sectional Analysis - Comparing a firm's financial ratios to other firms' ratios or industry averages. Current Ratio - A liquidity ratio found by current assets divided by current liabilities. Debt Ratio - A financing ratio found by total liabilities divided by total assets. Debt to Equity Ratio - A financing ratios found by total liabilities divided by total equity. DuPont Framework - An expanded formula of the return of equity, net margin times total asset turnover times leverage multiplier, which represent the components of profitability, activity (efficiency), and financing. Fixed Asset Turnover - An activity ratio found by sales divided by fixed assets.