{
  "deck_name": "Financial Ratios",
  "cards": [
    { "question": "What is the purpose of financial ratio analysis?", "answer": "It summarizes relationships in financial statements to support comparisons over time or with relevant peers." },
    { "question": "What do liquidity ratios assess?", "answer": "A company's ability to meet short-term obligations as they come due." },
    { "question": "What is the current ratio formula?", "answer": "Current assets ÷ current liabilities." },
    { "question": "What is a common quick ratio formula?", "answer": "(Cash + short-term investments + net receivables) ÷ current liabilities; exact conventions can vary." },
    { "question": "Why does the quick ratio usually exclude inventory?", "answer": "Inventory may take time to sell and convert into cash, so it is less immediately liquid than cash or receivables." },
    { "question": "What do solvency ratios assess?", "answer": "A company's capacity to meet longer-term obligations and sustain its financing structure." },
    { "question": "What is a common debt-to-assets formula?", "answer": "Total debt or liabilities ÷ total assets; analysts should state which debt definition they use." },
    { "question": "What does the debt-to-equity ratio compare?", "answer": "A stated measure of debt with shareholders' equity; the numerator convention should be made explicit." },
    { "question": "What do efficiency ratios help assess?", "answer": "How effectively a company uses assets or working capital to generate activity such as sales or collections." },
    { "question": "What is a common inventory turnover formula?", "answer": "Cost of goods sold ÷ average inventory for the period." },
    { "question": "What is a common accounts receivable turnover formula?", "answer": "Net credit sales ÷ average net accounts receivable for the period." },
    { "question": "What does total asset turnover measure?", "answer": "Sales generated per unit of assets; a common formula is net sales ÷ average total assets." },
    { "question": "What do profitability ratios assess?", "answer": "How effectively a company generates earnings relative to sales, assets, or equity." },
    { "question": "What is the net profit margin formula?", "answer": "Net income ÷ net sales; multiply by 100 to express it as a percentage." },
    { "question": "What is a common return on assets formula?", "answer": "Net income ÷ average total assets; some courses use ending assets, so follow the stated convention." },
    { "question": "What is a common return on equity formula?", "answer": "Net income available to common shareholders ÷ average common shareholders' equity, when that convention is specified." },
    { "question": "What does earnings per share (EPS) express?", "answer": "Earnings attributable to common shareholders per weighted-average common share outstanding." },
    { "question": "What is the price-to-earnings (P/E) ratio formula?", "answer": "Market price per share ÷ earnings per share for the stated period." },
    { "question": "Why is a ratio rarely meaningful without context?", "answer": "Its interpretation depends on the company's industry, accounting choices, business model, and comparison period." },
    { "question": "What is one limitation of ratio analysis?", "answer": "Ratios use reported and often historical data; they can flag questions but do not prove a cause or predict results by themselves." }
  ]
}