Exam 16: Financial Statement Analysis

MATCHING Match the classifications of ratios with each description. a. Liquidity Ratio b. Leverage Ratio c. Profitability Ratio d. Horizontal Analysis e. Trend Analysis -Measures the ability of a company to meet long and short term obligations

The use of estimates, cost, alternative accounting methods, the presence of atypical data, and diversification of firms are all factors that may limit the usefulness of financial statement analysis. Identify a ratio and explain how one or more of the limiting factors can affect the usefulness of that ratio.

Ratios by themselves tell little about the financial well-being of a company. For meaningful analysis, the ratios should be compared with a standard. Describe the two standards commonly used.

Presented below are selected data from the financial statements of eMonstore.com for 2014, 2013, and 2012.

In vertical analysis of the income statement, cost of goods sold is represented by 100%.

MATCHING Match the classifications of ratios with each description. a. Liquidity Ratio b. Leverage Ratio c. Profitability Ratio d. Horizontal Analysis e. Trend Analysis -Times-interest-earned ratio

Dividing the market price of a share of stock by the earnings per share gives the price-earnings ratio.

Lisa's Dress Company, a retailer, had cost of goods sold of $180,000 last year. The beginning inventory balance was $13,000 and the ending inventory balance was $18,000. The company's average inventory turnover in days was closest to

MATCHING Match the classifications of ratios with each description. a. Liquidity Ratio b. Leverage Ratio c. Profitability Ratio d. Horizontal Analysis e. Trend Analysis -Debt ratio

The ________________ is a measure of the ability of a company to pay its short-term liabilities out of short-term assets.