Stmt. of CF Facts
These are the three main sections of the statement of cash flows.
What are operating, investing, and financing activities?
Investing Activities use this section of the balance sheet.
What is long-term assets?
This is another term for Vertical Analysis.
What is common-size analysis or creating common-size financial statements?
This ratio shows a company's debt compared to its equity.
What is the debt to equity ratio?
Operating Activities account for these sections of the balance sheet.
What are changes in Current Assets and Current Liaibilities?
When determining whether to add or subtract changes in current assets/liabilities, this is the note Mr. Reinhardt provided.
Assets are opposite, liabilities are the same. Increases in assets get subtracted. Increases in liabilities get added.
This is another term for Horizontal Analysis.
What is Trend Analysis or Time-Based Analysis?
This ratio shows the company's ability to cover its current liabilities with current assets.
What is the current ratio?
These are the two methods used to prepare the statement of cash flows.
What are the indirect and direct methods?
This is the section where noncash adjustments are recorded in the statement of cash flows.
What is the operating activities section?
This is the formula for the percentage change between two numbers.
What is (new - old) / old?
This ratio shows the percentage of sales a company keeps after accounting for all expenses.
What is the profit margin?
These are examples of noncash activities that must be adjusted for in the statement of cash flows.
What are depreciation expense and gains/losses on sales of long-term assets?
Financing activities account for these sections of the balance sheet.
What are the Long-Term Liabilities and Stockholders' Equity sections?
True or False: Selling a piece of equipment is considered a discontinued operation.
What is false?
This ratio shows how long, on average, inventory sits on a company's shelves before it is sold.
What is the average days in inventory ratio?
This is the method most companies use to prepare the statement of cash flows.
What is the indirect method?
This section of the statement of cash flows records interest received and interest paid.
What is the operating activities section?
An example of this accounting practice is increasing the allowance for uncollectible accounts.
What is conservative accounting practices?
This ratio shows how well a company uses its assets to generate a profit.
What is the ROA?