analyzing and interpreting financial statement information

analyzing and interpreting financial statement information

FINANCIAL STATEMENT ANALYSIS

COMPLETION STATEMENTS

223. In analyzing and interpreting financial
statement information, three major characteristics are generally
evaluated: (1)____________,
(2)_____________, and (3)_____________.

224. ______________ analysis, also called trend analysis,
is a technique for evaluating a percentage increase or decrease for a financial
statement item over a period of time.

225. Expressing each item within a financial
statement as a percentage of a base amount is called ______________ analysis.

226. The ratios used in evaluating a company’s
liquidity and short-term debt paying ability that complement each other are the
______________ ratio and the ______________ ratio.

227. The accounts receivable turnover is
calculated by dividing _________________ by average ___________________.

228. If inventory turnover is 8 times, and the
average inventory was $400,000, the cost of goods sold during the year was
$______________ and the days in inventory was ______________ days.

229. Stanton Corporation had net income for the
year of $200,000 and a profit margin of 20%. If total average assets were
$400,000, the asset turnover ratio was ____________ times.

230. The ______________ ratio measures the
percentage of earnings distributed in the form of cash dividends.

231. The lower the ______________ to
______________ ratio, the more equity “buffer” there is available to
the creditors.

232. Times interest earned is calculated by
dividing _____________ before _______________ and ________________ by interest
expense.

233. Discontinued operations refers to the
disposal of a ______________ of a business.

234. The two criteria necessary for an item to be
classified as an extraordinary item are that the transaction or event must be
(1) __________________ and (2) ___________________.

235. A change in inventory methods during the
year would be classified as a change in __________________.


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