Acc Ch 14 Terms

Front 1

Evaluating a company’s ability to convert assets into cash

Back 1

Liquidity

Front 2

A company’s ability to make its periodic interest payments and repay the base amount of debt at maturity

Back 2

Solvency

Front 3

Evaluating a company’s ability to generate earnings

Back 3

Profitability

Front 4

Express a financial statement Item or set of financial statement items as a percentage of another financial statement item, in order to measure an important economic relationship that’s a single number

Back 4

Ratios

Front 5

The analysis of increases and decreases in the amount and percentage of comparative financial statement items

Back 5

Horizontal analysis

Front 6

The percentage analysis of the relationship of each component in a financial statement to a total within the statement

Back 6

Vertical analysis

Front 7

Evaluate the company’s ability to pay its current liabilities

Back 7

Current position analysis