Investment and Finance
The most frequently asked tax questions related to Investment and Finance
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Answer Tax QuestionsWhat is a Dividend Yield as it applies to Financial Statements ?
Asked Wednesday, October 11, 2000 by an anonymous user
The Dividend Yield is the relationship between cash dividends paid to shareholders and the market price per share of common stock. Dividends per share of common stock, divided by the Market price per share of common stock = Dividend Yield.
What is the Total Asset Turnover as it relates to Financial Statements?
Asked Wednesday, October 11, 2000 by an anonymous user
The Total Asset Turnover indicates the efficiency with which the business uses all of its assets to generate sales. Sales, divided by Total assets = TAT.
What is the Debt Ratio as it relates to Financial Statements?
Asked Wednesday, October 11, 2000 by an anonymous user
The Debt Ratio measures the proportion of total assets financed by the business' creditors. The higher the ratio, the greater the amount of other people's money being used in an attempt
to generate profits. Total Liabilities, divided by Total assets = Debt Ratio.
What is the Times Interest Earned Ratio as it relates to Financial Statements?
Asked Wednesday, October 11, 2000 by an anonymous user
The Times Interest Earned Ratio measures the business' ability to make contractual interest payments. The higher the ratio, the better able the business is to fulfill its interest obligations. Earnings before interest and taxes, divided by Interest = Times Interest Earned Ratio.
What is the Gross Profit Margin as it relates to Financial Statements ?
Asked Wednesday, October 11, 2000 by an anonymous user
The gross profit on inventory is divided by the average profit of the inventory. Low end items may be marked up 500% while a high end is only 30%. Use the average profit across all inventory items. If the average is 10, which means for every dollar you invested, you earned $10 more in profit.
What is the Net Profit Margin, as it relates to Financial Statements ?
Asked Wednesday, October 11, 2000 by an anonymous user
The Net Profit Margin measures the percentage of each sales dollar remaining after all expenses, including taxes, have been deducted. The higher the business' net profit margin the better. "Good" net profit margins differ considerably across industries. Net profits after taxes, divided by Sales = Net Profit Margin.
What does GAAP stand for?
Asked Wednesday, October 11, 2000 by an anonymous user
GAAP is the abbreviation for "generally accepted accounting principles". They are the U.S. practice and procedure guidelines used to prepare and maintain financial records and reports and statements. They are authorized by the Financial Accounting Standards Board.
Officially established accounting principles consist of FASAB Statements of Federal Financial Accounting Standards (Standards) and Interpretations. FASAB Standards and Interpretations will be periodically incorporated in a publication by the FASAB.
What is the SEC ?
Asked Wednesday, October 11, 2000 by an anonymous user
The SEC is the abbreviation for the Securities and Exchange Commission. It is the federal regulatory body that governs the sale and listing of securities.
What is a Publically-held Corporation ?
Asked Wednesday, October 11, 2000 by an anonymous user
A publically-held corporation is a corporation whose stock is traded on either an organized securities exchange or on the over-the-counter exchange, or those with more than $5 million in assets and 500 or more stockholders.
