Purpose: (L.O. 1 thru 7) This exercise will quiz you about terminology used in this chapter.
A list of accounting terms with which you should be familiar appears below:
|Acid-test (quick) ratio||Price-earnings (P-E) ratio|
|Asset turnover||Profit margin|
|Change in accounting principle||Profitability ratios|
|Comprehensive income||Pro forma income|
|Current ratio||Quality of earnings|
|Debt to total assets ratio||Ratio|
|Discontinued operations||Ratio analysis|
|Earnings per share (EPS)||Receivables turnover|
|Extraordinary items||Return on assets|
|Horizontal analysis||Return on common stockholders' equity|
|Inventory turnover||Solvency ratios|
|Leveraging||Times interest earned|
|Liquidity ratios||Trading on the equity (leverage)|
|Payout ratio||Vertical analysis|
For each item below, enter in the blank the term that is described.
- __________________________________ A technique for evaluating financial statement data that expresses each item within a financial statement in terms of a percent of a base amount; often called common-size analysis.
- __________________________________ A technique for evaluating a series of financial statement data over a period of time to determine the increase (decrease) that has taken place, expressed as either an amount or a percentage; often called trend analysis.
- __________________________________ An expression of the mathematical relationship between one quantity and another. The relationship may be expressed either as a percentage, ...