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9 Cards in this Set
- Front
- Back
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what is horizontal analysis?
ex. |
comparative financial statements of two or more years
substract $ from both y/o then over past $ |
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if year 2009, 2008 & 2007 is being compared, which is the base line?
ability to earn income? |
The earlier/current statement is always first: 2009
profitability |
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what is vertical analysis?
ex. |
compare within the same category of the year
current asset/ total asset * 100% |
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What is common size statement?
what is solvency? |
% analysis statement only in % amount to compare industries
ability of a business to pay debt & earn income |
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working capital is...
Current position analysis... |
excess of current assets ; tot of current assets - current liab
business ability to pay its current liability |
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current ratio formula:
what r other names for it? T o F: it tells of working c more than solvency what is a usually good #? |
Tot current A / Tot current L
working capital ratio, bankers ratio F, tells more of solvency 2:1 |
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Quick ratio=
what r other names for it? what is it? |
= quick A / current L
acid test ratio "instant debt paid" analysis |
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What r current assets?
what r quick assets? What is account receivable net? |
current: cash, inventory, A/R, prepaid, S/T market securities
quick: $, A/R, S/T market securities A/R - allowances for doubtful acc. |
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A/R turn over denotes
Formula how do u find ave A/R? |
How quickly receivable is converted to $
Net sales / ave A/R (Beg A/R + End A/R) / 2 |
