10 terms

Financial Statement Analysis

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The percentage analysis of increases and decreases in individual items in comparative financial statements is called
Horizontal analysis
The percent of fixed assets to total assets is an example of
Vertical analysis
Assume the following sales data for a company:
Current year $325,000
Preceding year 250,000
What is the percentage increase in sales from the preceding year to the current year?
325000-250000=75000/250000*100
=30%
Horizontal analysis is a technique for evaluating financial statement data
Over a period of time
Horizontal analysis of comparative financial statements includes
Calculation of dollar amount changes and percentage changes from the previous to the current year
Income statement information for Sadie Company is below:
Sales $175,000
7. MC.15-74
8. MC.15-86
9. MC.15-99
10. MC.15-112
Cost of goods sold 115,000
Gross profit $ 60,000
Using vertical analysis of the income statement for Sadie Company, determine the gross profit margin
60000/175000=34%
In a vertical analysis, the base for cost of goods sold is
Sales
An acceleration in the collection of receivables will tend to cause the accounts receivable turnover to
Increases
Accounts payable $ 30,000
Accounts receivable 35,000
Accrued liabilities 7,000
Cash 25,000
Intangible assets 40,000
Inventory 72,000
Long-term investments 100,000
Long-term liabilities 75,000
Marketable securities 36,000
Notes payable (short-term) 20,000
Property, plant, and equipment 400,000
Prepaid expenses 2,000
Based on the above data, what is the quick ratio, rounded to one decimal point?
(Accounts receivable + cash + marketable securities)/(Accounts payable + accrued liabilities + notes payable)=1.7
A common measure of liquidity is
The account receivable turnover