Podcast
Questions and Answers
How can the current ratio be improved near the end of the year?
How can the current ratio be improved near the end of the year?
- Delaying payments to suppliers
- Increasing long-term debt
- Paying off short-term debt using cash (correct)
- Investing in long-term assets
Why may year-end data not be typical of the entity's position during the year?
Why may year-end data not be typical of the entity's position during the year?
- Transactions near year-end aimed at improving ratios
- Lack of disclosure in financial reports
- Exclusion of one-off items in financial reports
- Low activity at financial year-end affecting account balances (correct)
What might inhibit the extent of analysis in general purpose financial reports?
What might inhibit the extent of analysis in general purpose financial reports?
- Comparability between entities
- Lack of disclosure in financial reports (correct)
- One-off items in profit statements
- Modifications in accompanying documents
Why might analysts choose to exclude one-off items from financial ratios?
Why might analysts choose to exclude one-off items from financial ratios?
What factor may hinder the comparability between competing entities in financial analysis?
What factor may hinder the comparability between competing entities in financial analysis?
In financial analysis, why might management enter into certain types of transactions near the end of the year?
In financial analysis, why might management enter into certain types of transactions near the end of the year?
Which factor may distort the representation of account balances like receivables, payables, and inventories at year-end?
Which factor may distort the representation of account balances like receivables, payables, and inventories at year-end?
Why do many analysts exclude one-off or non-recurring items from financial ratios?
Why do many analysts exclude one-off or non-recurring items from financial ratios?
What may be subject to modifications, supplementations, and qualifications expressed in accompanying documents in general purpose financial reports?
What may be subject to modifications, supplementations, and qualifications expressed in accompanying documents in general purpose financial reports?
What factor hinders comparability between competing entities in financial analysis?
What factor hinders comparability between competing entities in financial analysis?
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