"Magazine and in 2012 Professional Builder Magazine named Toll Brothers 'Builder of the Year'. An analysis of the Q4 2015 financial reports indicates that Toll Brothers had a current ratio (current assets / current liabilities) of over 9. These assets provided Toll Brothers with working capital of over US$7.297 billion. Toll Brothers had a quick ratio (acid test) of 1.33. Toll Brothers had an accounts receivable turnover of 15.6 providing an average days' sales in accounts receivable of 23.4 days. Inventory turnover was 0.48 with an average days' sales in inventory of 764 days. Toll Brothers' had a debt-to-equity ratio"
"consumed during the normal operating cycle of the business. On a balance sheet, assets will typically be classified into current assets and long-term assets. The current ratio is calculated by dividing total current assets by total current liabilities. It is frequently used as an indicator of a company's liquidity, its ability to meet short-term obligations. The difference between current assets and current liability is referred to as trade working capital. The quick ratio, or acid-test, measures the ability of a company to use its ""near cash"" or quick assets to extinguish or retire its current liabilities immediately. Quick assets are"
"Current ratio The current ratio is a liquidity ratio that measures whether or not a firm has enough resources to meet its short-term obligations. It compares a firm's current assets to its current liabilities, and is expressed as follows: formula_1 The current ratio is an indication of a firm's liquidity. Acceptable current ratios vary from industry to industry. In many cases, a creditor would consider a high current ratio to be better than a low current ratio, because a high current ratio indicates that the company is more likely to pay the creditor back. Large current ratios are not always"
"liquidity (i.e., the better able to meet current obligations using liquid assets). Quick ratio In finance, the quick ratio, also known as the acid-test ratio is a type of liquidity ratio which measures the ability of a company to use its ""near cash"" or quick assets to extinguish or retire its current liabilities immediately. Quick assets include those current assets that presumably can be quickly converted to cash at close to their book values. It is the ratio between quickly available or liquid assets and current liabilities. A normal liquid ratio is considered to be 1:1. A company with a"
"liabilities. A ratio higher than one means that current assets, if they can all be converted to cash, are more than sufficient to pay off current obligations. All other things equal, higher values of this ratio imply that a firm is more easily able to meet its obligations in the coming year. The difference between current assets and current liability is referred to as trade working capital. Current liability In accounting, current liabilities are often understood as all liabilities of the business that are to be settled in cash within the fiscal year or the operating cycle of a given"
"current liability called ""current portion of long-term debt"" (or a similar name). The remaining long-term debt is used in the numerator of the long-term-debt-to-equity ratio. A similar ratio is debt-to-capital (D/C), where capital is the sum of debt and equity: The relationship between D/E and D/C is: The debt-to-total assets (D/A) is defined as It is a problematic measure of leverage, because an increase in non-financial liabilities reduces this ratio. Nevertheless, it is in common use. In the financial industry (particularly banking), a similar concept is equity to total assets (or equity to risk-weighted assets), otherwise known as capital adequacy."
"Quick ratio In finance, the quick ratio, also known as the acid-test ratio is a type of liquidity ratio which measures the ability of a company to use its ""near cash"" or quick assets to extinguish or retire its current liabilities immediately. Quick assets include those current assets that presumably can be quickly converted to cash at close to their book values. It is the ratio between quickly available or liquid assets and current liabilities. A normal liquid ratio is considered to be 1:1. A company with a quick ratio of less than 1 cannot currently fully pay back its"
"current liabilities. This ratio is considered to be much better and reliable as a tool for assessment of liquidity position of firms. formula_1 or specifically: formula_2 Note that inventory is excluded from the sum of assets in the quick ratio, but included in the current ratio. Ratios are tests of viability for business entities but do not give a complete picture of the business' health. If a business has large amounts in accounts receivable which are due for payment after a long period (say 120 days), and essential business expenses and accounts payable due for immediate payment, the quick ratio"
"Accounting liquidity In accounting, liquidity (or accounting liquidity) is a measure of the ability of a debtor to pay their debts as and when they fall due. It is usually expressed as a ratio or a percentage of current liabilities. Liquidity is the ability to pay short-term obligations. For a corporation with a published balance sheet there are various ratios used to calculate a measure of liquidity. These include the following: For different industries and differing legal systems the use of differing ratios and results would be appropriate. For instance, in a country with a legal system that gives a"
"Debt ratio Debt Ratio is a financial ratio that indicates the percentage of a company's assets that are provided via debt. It is the ratio of total debt (long-term liabilities) and total assets (the sum of current assets, fixed assets, and other assets such as 'goodwill'). formula_1 or alternatively: formula_2 For example, a company with $2 million in total assets and $500,000 in total liabilities would have a debt ratio of 25%. Total liabilities divided by total assets or the debt/asset ratio shows the proportion of a company's assets which are financed through debt. If the ratio is less than"
"less than one. Inventory is valued at the cost of acquiring it and the firm intends to sell the inventory for more than this cost. The sale will therefore generate substantially more cash than the value of inventory on the balance sheet. Low current ratios can also be justified for businesses that can collect cash from customers long before they need to pay their suppliers. Current ratio The current ratio is a liquidity ratio that measures whether or not a firm has enough resources to meet its short-term obligations. It compares a firm's current assets to its current liabilities, and"
"and liabilities separately from non-current amounts. Current assets are the most liquid assets of a firm, which can be realized in 12 months period. Current assets include: Non-current assets include fixed or long-term assets and intangible assets: Liabilities include: Owner's equity, sometimes referred to as net assets, is represented differently depending on the type of business ownership. Business ownership can be in the form of a sole proprietorship, partnership, or a corporation. For a corporation, the owner's equity portion usually shows common stock, and retained earnings (earnings kept in the company). Retained earnings come from the retained earnings statement, prepared"
"than the interest rate paid to creditors. Equity ratio The equity ratio is a financial ratio indicating the relative proportion of equity used to finance a company's assets. The two components are often taken from the firm's balance sheet or statement of financial position (so-called book value), but the ratio may also be calculated using market values for both, if the company's equities are publicly traded. The equity ratio is a very common financial ratio, especially in Central Europe and Japan, while in the US the debt to equity ratio is more often used in financial (research) reports. The formula"
"Debt-to-equity ratio The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. Closely related to leveraging, the ratio is also known as risk, gearing or leverage. The two components are often taken from the firm's balance sheet or statement of financial position (so-called book value), but the ratio may also be calculated using market values for both, if the company's debt and equity are publicly traded, or using a combination of book value for debt and market value for equity financially. Preferred stock can be considered part"
"Equity ratio The equity ratio is a financial ratio indicating the relative proportion of equity used to finance a company's assets. The two components are often taken from the firm's balance sheet or statement of financial position (so-called book value), but the ratio may also be calculated using market values for both, if the company's equities are publicly traded. The equity ratio is a very common financial ratio, especially in Central Europe and Japan, while in the US the debt to equity ratio is more often used in financial (research) reports. The formula for calculating D/E ratios can be represented"
"On a balance sheet, the formal definition is that debt (liabilities) plus equity equals assets, or any equivalent reformulation. Both the formulas below are therefore identical: Debt to equity can also be reformulated in terms of assets or debt: General Electric Co. () Debt-to-equity ratio The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. Closely related to leveraging, the ratio is also known as risk, gearing or leverage. The two components are often taken from the firm's balance sheet or statement of financial position (so-called book"
"of share capital. Throughout the business's existence, the equity of the business will be the difference between its assets and debt liabilities; this is the accounting equation. When a business liquidates during bankruptcy, the proceeds from the assets are used to reimburse creditors. The creditors are ranked by priority, with secured creditors being paid first, other creditors being paid next, and owners being paid last. Owner's equity (also known as risk capital or liable capital) is this remaining or residual claim against assets, which is paid only after all other creditors are paid. In such cases where even creditors could"
"which are not late in payment. There may be footnotes in audited financial statements regarding past due payments to lenders, but this is not common practice. Lawsuits regarding loans payable are required to be shown on audited financial statements, but this is not necessarily common accounting practice. The proper classification of liabilities provides useful information to investors and other users of the financial statements. It may be regarded as essential for allowing outsiders to consider a true picture of an organization's fiscal health. One application is in the current ratio, defined as the firm's current assets divided by its current"
"that equity plus liabilities equals assets is therefore an accounting identity (it is, by definition, true). Other definitions of debt to equity may not respect this accounting identity, and should be carefully compared. Generally speaking, a high ratio may indicate that the company is much resourced with (outside) borrowing as compared to funding from shareholders. In a general sense, the ratio is simply debt divided by equity. However, what is classified as debt can differ depending on the interpretation used. Thus, the ratio can take on a number of forms including: In a basic sense, Total Debt / Equity is"
"Financial ratio A financial ratio or accounting ratio is a relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers within a firm, by current and potential shareholders (owners) of a firm, and by a firm's creditors. Financial analysts use financial ratios to compare the strengths and weaknesses in various companies. If shares in a company are traded in a financial market, the market price of"
"a measure of all of a company's future obligations on the balance sheet relative to equity. However, the ratio can be more discerning as to what is actually a borrowing, as opposed to other types of obligations that might exist on the balance sheet under the liabilities section. For example, often only the liabilities accounts that are actually labelled as ""debt"" on the balance sheet are used in the numerator, instead of the broader category of ""total liabilities"". In other words, actual borrowings like bank loans and interest-bearing debt securities are used, as opposed to the broadly inclusive category of"
"of debt or equity. Attributing preferred shares to one or the other is partially a subjective decision but will also take into account the specific features of the preferred shares. When used to calculate a company's financial leverage, the debt usually includes only the Long Term Debt (LTD). Quoted ratios can even exclude the current portion of the LTD. The composition of equity and debt and its influence on the value of the firm is much debated and also described in the Modigliani-Miller theorem. Financial economists and academic papers will usually refer to all liabilities as debt, and the statement"
"their liabilities. A bit of accounting theory is helpful to understanding this debate. It is an accounting identity (i.e., a rule that must hold true by definition) that assets equals the sum of liabilities and equity. Equity is primarily the common or preferred stock and the retained earnings of the company and is also referred to as capital. The financial statement that reflects these amounts is called the balance sheet. If a firm is forced into a negative equity scenario, it is technically insolvent from a balance sheet perspective. However, the firm may have sufficient cash to pay its short-term"
"point in time of a business' calendar year. A standard company balance sheet has two sides: assets, on the left and financing, which itself has two parts, liabilities and ownership equity, on the right. The main categories of assets are usually listed first, and typically in order of liquidity. Assets are followed by the liabilities. The difference between the assets and the liabilities is known as equity or the net assets or the net worth or capital of the company and according to the accounting equation, net worth must equal assets minus liabilities. Another way to look at the balance"
"Debt-to-capital ratio A company's debt-to-capital ratio or D/C ratio is the ratio of its total debt to its total capital, its debt and equity combined. The ratio measures a company's capital structure, financial solvency, and degree of leverage, at a particular point in time. The data to calculate the ratio are found on the balance sheet. Practitioners use different definitions of debt: Companies alter their D/C ratio by issuing more shares, buying back shares, issuing additional debt, or retiring debt. A measurement of a company's financial leverage, calculated as the company's debt divided by its total capital. Debt includes all"
"company's latest quarterly balance sheet). This ratio is much more useful when comparing it to other companies being valued. Similar to ROIC, ROA, expressed as a percent, measures the company's ability to make money from its assets. To measure the ROA, take the pro forma net income divided by the total assets. However, because of very common irregularities in balance sheets (due to things like Goodwill, write-offs, discontinuations, etc.) this ratio is not always a good indicator of the company's potential. If the ratio is higher or lower than expected, one should look closely at the assets to see what"
"liabilities. Being able to be positive and negative, indicating the companies current financial position and the health of the balance sheet. This can be further split into: Which includes investment in receivables that is the volume of credit sales, and collection period. Credit policy which includes credit standards, credit terms and collection efforts. Which are stocks of manufactured products and the material that make up the product, which includes raw materials, work-in-progress, finished goods, stores and spares (supplies). For a retail business, for example, this will be a major component of their current assets. Concerned with the management of cash"
"financial statements because it allows those using the statements to assess the strength of the business in both the short-term as well as the long-term, but separately. Information about current liabilities of a company alongside its current assets give crucial information about the liquidity of a company while fixed-liabilities given together with non-current assets tells the story of the company's long-term solvency. Fixed liability A fixed liabilities are a debts. bonds, mortgages or loans that are payable over a term exceeding one year. These debts are better known as non-current liabilities or long-term liabilities. Debts or liabilities due within one"
"0.5, most of the company's assets are financed through equity. If the ratio is greater than 0.5, most of the company's assets are financed through debt. Companies with high debt/asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the firm's operation. In addition, high debt to assets ratio may indicate low borrowing capacity of a firm, which in turn will lower the firm's financial flexibility. Like all financial ratios, a company's debt ratio should be compared with their industry average or other competing firms. Debt ratio Debt Ratio is a"
"a good sign for investors. If the company's current ratio is too high it may indicate that the company is not efficiently using its current assets or its short-term financing facilities. If current liabilities exceed current assets the current ratio will be less than 1. A current ratio of less than 1 indicates that the company may have problems meeting its short-term obligations. Some types of businesses can operate with a current ratio of less than one, however. If inventory turns into cash much more rapidly than the accounts payable become due, then the firm's current ratio can comfortably remain"
"represents the total number of shares that an individual shareholder owns (usually the owner with controlling interest), multiplied by each share's book value. It is important to make this distinction when calculating ratios. Profitability ratios measure the company's use of its assets and control of its expenses to generate an acceptable rate of return Liquidity ratios measure the availability of cash to pay debt. Activity ratios measure the effectiveness of the firm's use of resources. Debt ratios quantify the firm's ability to repay long-term debt. Debt ratios measure financial leverage. Market ratios measure investor response to owning a company's stock"
"in the following way: Debt - Equity Ratio = Total Liabilities / Shareholders' Equity The result may often be expressed as a number or as a percentage. This form of D/E may often be referred to as risk or gearing. The Equity Ratio is a good indicator of the level of leverage used by a company. The Equity Ratio measures the proportion of the total assets that are financed by stockholders, as opposed to creditors. A low equity ratio will produce good results for stockholders as long as the company earns a rate of return on assets that is greater"
"financial statement showing a firm's assets, liabilities and equity (capital) at a set point in time, usually the end of the fiscal year reported on the accompanying income statement. The total assets always equal the total combined liabilities and equity in dollar amount. This statement best demonstrates the basic accounting equation - ""Assets = Liabilities + Equity"". The statement can be used to help show the status of a company. Accounting standards often set out a general format that companies are expected to follow when presenting their balance sheets. International Financial Reporting Standards normally require that companies report current assets"