Exam 12: Financial Statement Analysis

The most recent period in a horizontal analysis is called the __________ period.

In computing trend percentages, the most recent year amounts become the base and are always set to 100%.

If management wishes to determine the delinquency of charge customers, they could use the:

Other income (such as rental income) and other expenses (such as interest expense) are listed immediately after:

Determining the percentage changes in line items on financial statements for two consecutive years is called __________ analysis.

A company has $56,000 in cash; $12,000 in accounts receivable; $25,000 in short-term investments; and $100,000 in merchandise inventory. The company also has $60,000 in current liabilities. The company's quick ratio is __________.

What type of application is required per IFRS and ASPE when changing from the application of one principle to another?

Comparing your company with a leading company in the same category of business is called __________.

Which analysis deals with the percentage of changes in certain items over a period of years?

To determine the ability of a company to service debt, you would calculate the debt ratio.

Which ratio measures the earnings of a company on each sales dollar?

Statements that are often used to compare similar businesses are called:

Inventory turnover would be highest for which of the following?

A distinguishable part of a business that is subject to a different set of risks and returns than other parts of the business is called a __________.

Common-size statements use the same percentages that are computed during a __________ analysis, but no dollar amounts are shown.

Rick's has a cash balance of $80,000; short-term investments of $20,000; net receivables of $60,000; and inventory of $450,000. Current liabilities total $200,000. Ricks' acid test (quick ratio) is within __________.

Interest expense was $10,000; income tax expense was $20,000; and net income after taxes is $60,000. The number of times interest was earned is __________.

According to the Risk Management Association, the debt ratio for most companies ranges from 0.57 - 0.67.

Predictions about a company's future earnings can best be inferred from the:

A liquidity ratio is defined as the ability to meet short-term obligations with current assets.