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Integra Financial Glossary

Wondering what the elements of a financial statement mean, wait no longer. Integra's Financial Glossary will help you get the answers you need.

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    Accounts Payable

    Amount owed to suppliers for goods and services purchased on credit.

    Accounts Payable to Sales

    % sales that is payable to suppliers. A very high percentage may suggest that the company has a liquidity problem.

    FORMULA:Average Accounts Payable / Revenue
    Accounts Payable to Total Debt

    Indicates the % of accounts payable to total debt. Assists in looking at debt as an option to finance payables.

    FORMULA:Accounts Payable / Total Liabilities
    Accounts Receivable

    Gross amounts owed by customers for products bought or services already rendered on credit.

    FORMULA:Average Accounts Receivable/Total Revenue
    Accounts Receivable, net

    Amount that the company anticipates to collect from accounts receivable.

    FORMULA:Accounts Receivable - Allowance for Bad Debt,Net Accounts Receivable (prior year) - Net Accounts Receivable (current year)
    Accrual Basis

    The accrual basis of accounting realizes revenues when goods are sold or services are performed and expenses when incurred whether or not cash has been received or paid out.

    Accumulated Amortization

    Cumulative charges against the intangible assets of a company over the expected useful life of the assets.

    Accumulated Depletion

    Cumulative charges against the depletable assets of a company.

    Accumulated Depreciation

    Total depreciation of property, plant, and equipment that has been expensed on the income statement.

    FORMULA:Accumulated Depreciation (beginning) + (beginning value of Property, Plant, & Equipment - ending value of Property, Plant, & Equipment))
    Advertising & Sales

    Expense item showing costs associated with advertising. Examples Include: promotion, publicity expenses.

    After-Tax Return on Assets

    Indicates profit as a percentage of total assets after income taxes and measures a company's ability to manage and allocate resources

    FORMULA:Net Income / Total Assets
    After-Tax Return on Net Worth

    Net income as a percentage of net worth. This ratio is not applicable if the company's net worth has a negative value.

    FORMULA:Net Income / Total Net Worth
    After-Tax Return on Sales

    Net income as a percent of revenue.

    FORMULA:Net Income / Revenue
    Allowance for Bad Debt

    Reserve set aside to cover uncollectible doubtful notes, accounts and loans as an allowance to accounts receivable.


    The process of spreading the cost of an intangible asset over the expected useful life of the asset.


    Items of value owned by a company. Includes cash, marketable securities, accounts receivable, raw materials, work in process, finished goods, other current assets, property, plant & equipment, intangible assets, depletable assets, investments, and other assets.

    Average Cash

    Average amount of current assets made up of demand deposits and time & savings deposits.

    FORMULA:(Cash (current year) + Cash (prior year)) / 2
    Average Current Assets

    Average amount of cash, securities, accounts receivable, and inventory which can easily be liquidated or are expected to be sold or used within one year.

    FORMULA:(Current Assets (current year) + Current Assets (prior year)) / 2
    Average Fixed Assets

    Average amount of assets with a useful life of more than one year, that a company is using in the business rather than for resale.

    FORMULA:(Property, Plant & Equipment, net (current year) + Property, Plant & Equipment, net (prior year)) / 2
    Average Inventory

    Average amount of goods owned by a company that are going to be sold.

    FORMULA:(Inventory (current year) + Inventory (prior year)) / 2
    Average Net Receivables
    FORMULA:(Net Accounts Receivable (current year) + Net Accounts Receivable (prior year)) / 2
    Average Total Assets
    FORMULA:(Total Assets (current year) + Total Assets (prior year)) / 2
    Average Working Capital
    FORMULA:(Working Capital (current year) + Working Capital (prior year)) / 2

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