Financial Statement Analysis

Which of the following is NOT considered a basic element of financial statement analysis?

Which user group primarily utilizes financial statement analysis to assess the effectiveness of management's operational decisions?

Solvency, as a building block of analysis, solely focuses on a company's ability to meet its short-term obligations.

Which financial statement is primarily used to assess a company's financial position at a specific point in time?

When performing intercompany analysis, what is the primary focus?

Which analysis tool involves comparing a company's financial condition and performance across time?

In horizontal analysis, the base period amount is always the amount from the most recent year being analyzed.

Which formula is used to calculate the percentage change in comparative statements?

In comparative statements, if the accounts payable increased from $44,000 in 2023 to $67,000 in 2024, what is the dollar change?

What does trend analysis primarily aim to reveal?

In trend analysis, if 2020 is the base year, the amounts for 2020 will equal ____ %.

If revenues for a company in 2021 were $290,000 and the base year (2020) revenues were $275,000, what is the trend percentage for 2021?

Trend analysis is limited to analyzing revenue and is not applicable to other financial statement items.

Which analysis tool involves comparing a company's financial condition and performance to a base amount?

What is another term for vertical analysis, often used when presenting financial statements?

In common-size balance sheets, what is typically used as the base amount?

If cash and equivalents are $12,000 and total assets are $315,000, what is the common-size percentage for cash and equivalents?

Common-size analysis uses revenues as the base amount on the balance sheet.

In a common-size income statement, each item is expressed as a percentage of ________.

Match the following analysis methods with their primary focus:

Which of the following statements is true regarding the purpose of financial statement analysis?

Who are the internal users of financial statements?

Liquidity and efficiency are the same thing in financial statement analysis.

Which financial statement provides information about a company's financial performance over a period of time?

What type of financial statement comparison involves analyzing data from different companies in the same industry?

Horizontal analysis focuses on comparing financial data of different companies at the same point in time.

In horizontal analysis, what is the formula to calculate the dollar change?

In comparative statements, the dollar amounts for the ________ period become the base period amounts when measuring the amount of change.

What type of analysis is used to reveal patterns in data covering successive periods?

If the cost of sales in 2021 is $198,000 and in the base year (2020) it was $190,000, what is the trend percentage for cost of sales in 2021?

Vertical analysis compares a company's financial data over a period of time.

In common-size statements, if you're analyzing the balance sheet, what serves as the base amount?

What is the base amount used in a common-size income statement?

If, in a common-size income statement, the cost of sales is 69.2% of revenues, what does this indicate?