Author: Anonymous

The building blocks of financial statement analysis include (1) liquidity, (2) solvency, (3) profitability, and (4) market prospects.

The full disclosure principle requires that noncash investing and financing activities be disclosed in the financial statements.

During the last lecture, the Professor went to Yahoo Finance. Which metric did he focus on to compare different companies?

Dividing Accounts receivable, net by Net sales and multiplying the result by 365 is the:

If assets are $99,000 and liabilities are $32,000, then equity equals:

Refer to the following selected financial information from Zanzibar Incorporated. Compute the company’s return on total assets for Year 2.    Year 2 Year 1 Net sales $ 478,500   $ 426,250   Cost of goods sold   276,300     250,120   Interest expense   9,700     10,700   Net income before tax   67,250     52,680   Net income after tax   46,050     39,900   Total assets   317,100     288,000   Total liabilities   181,400     167,300   Total equity   135,700     120,700  

Operating activities include long-term borrowing and repaying cash from lenders, and cash investments by or dividends paid to stockholders.

The income statement describes revenues earned and expenses incurred along with the resulting net income or loss over a specified period of time, due to earnings activities.

Tang Company reported Cost of goods sold of $835,000, beginning Inventory of $37,200 and ending Inventory of $46,300. The average Inventory amount is:

Horizontal analysis is used to reveal changes in the relative importance of each financial statement item.