1.The same for all companies regardless of size.(11,6)
A) PERFORMANCE LEVERS
2.Earnings before interest and taxes divided by interest expense.(4,8,6)
A) TIME INTEREST＿EARNED
3.Cost of goods sold divided by ending inventory.(9,8)
A) INVENTORY TURNOVER
4.Involves trend analysis and comparison of companies to peer group numbers.(5,8)
A) RATIO ANALYSIS
5.Focuses on solvency, having enough cash to pay the bills as they come due.(4,4,9)
A) CASH FLOW＿STATEMENT
6.Price per share divided by earnings per share.(2,5)
A) PE RATIO
7.Measures the fraction of each dollar of sales that trickles down through the income statement to profits.(6,6)
A) PROFIT MARGIN
8.Net income divided by the market value of shareholders’ equity.(8,5)
A) EARNINGS YIELD
9.Sales peak sharply at a point in time and are lower at other points.(8,9)
A) SEASONAL COMPANIES
10.Cash flow statement sources and uses: Increase in Inventories(3)
A) USE
11.A financial snapshot, taken at a point in time, all of the assets the company owns and all the claims against those assets.(7,5)
A) BALANCE SHEET
12.Gross profit divided by sales.(5,6)
A) GROSS MARGIN
13.Cash flow statement sources and uses: increase in accrued liabilities(6)
A) SOURCE
14.Records the extent to which net sales generated during the accounting period exceeded expenses incurred in producing the sales.(3,6)
A) NET INCOME
15.Profit margin times asset turnover.(3)
A) ROA
16.Certain assets and liabilities must appear on company financial statements at their market values instead of historical cost.(4,5)
A) FAIR VALUE
17.Sales divided by net property, plant, and equipment.(5,5,8)
A) FIXED ASSET＿TURNOVER
18.Collection period applied to accounts payable.(8,6)
A) PAYABLES PERIOD
19.Measures the sales generated per dollar of assets.(5,8)
A) ASSET TURNOVER
20.Current assets minus inventory divided by current liabilities.(4,4)
A) ACID TEST
21.The use to which the money is put creates the source of repayment.(16)
A) SELF-LIQUIDATING
22.Presents each asset and liability as a percentage of total assets.(6,4)
A) COMMON SIZE
23.The accountant depreciates the asset by a uniform amount each year.(13)
A) STRAIGHT-LINE
24.Divides change in owners’ equity occurring over a period of time into revenues and expense, where revenues are increases in equity and expenses are reductions.(6,9)
A) INCOME STATEMENT
25.Revenue is recognized as soon as “the effort required to generate the sale is substantially complete and there is a reasonable certainty that payment will be received.”(7,9)
A) ACCRUAL PRINCIPLE
26.EBIT times 1 minus the tax rate divided by interest-bearing debt plus equity.(4)
A) ROIC
27.The movement of money into or out of a cash account over a period of time.(4,4)
A) CASH FLOW
28.Net income divided by shareholders’ equity.(3)
A) ROE
29.Current assets divided by current liabilities.(7,5)
A) CURRENT RATIO
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