Financial Statement Analysis
_____ Analysis helps inform users compare past and current performance to make better descisions for the future
Comparative
Whats the purpose of horizontal analysis
To compare a company's performance over time
Vertical Analysis compares data within the same ____
Year
What is the Current Ratio
Current Assets / Current Liabilities
Financial Statement Analysis involves evaluating liquidity, solvency, and ________
profitability
What is the formula for horizontal anaylsis
(Analysis period amount - prior period amount) / prior period amount
Vertical analysis divides the analysis amount by _____
Base Amount
What is the Acid Test Ratio
Cash + Short term Investments + Accounts Receivable / Current Liabilities
This basis looks to other companies in industry for analysis
intercompany
If a company did 20000 in sales this year and last year did 10000, what is the horizontal percentage change?
100%
What is the common base amount used for balance sheets?
Total Assets
What is the Gross Profit Margin formula?
Gross Profit/ Net Sales
Who are the two primary users of financial statement Analysis
Investors and Creditors
Which Ancient civilization started accounting?
Ancient Mesopotamia
Vertical analysis is also known as
Common Size Analysis
What is the Price Earnings Ratio?
Market Price Per Share / Earning Per Share