Accounting 2
the comparison of a company's financial condition and performance to base amount is known as
vertical analysis
when do you use a note for significant non cash investing and financing activities
when important investing and financing activities do not affect cash receipts or payments, they are still disclosed at the bottom of the statement of cash flows or in a note to the statement bc of their importance and the full disclosure principal
profit margin ratio
profitability
return on common stockholders equity
profitability
return on total assest
profitability
debt rato
solvency
debt to equity ratio
solvency
equity ratio
solvency
the ability to generate future revenues and meet long term obligations is
solvency
times interest earned
solvency
A company sales i year 1 were $250,000 and Year 2 were $287500. Using Year 1 as the base year, the sales trend percent for year 2 is
115%
Analysis reveals that a company had a net decrease in cash of $4000 for the current year. Net cash provided by operating activities was $18000; net cash used in investing activities was $10,000 and net cash used in financing activities was $12,000. If the Year-end cash balance is 21,000, the beginning cash balance was:
25,000
Net cash flows from financing activities for the year were
88,000 of net cash used by the financing activities
the statement of cash flows is
a financial statement that reports the cash inflows and cash outflows for an accounting period, that classifies this cash flow as operating, investing, and financing activities
operating activités that are the same
accounts payable, taxes payable
operating activities that are opposite
accounts receivable, inventory, accounts payable,
days' sales uncollected
accounts receivable, net/net sales X 365
internal users of financial information
are those individuals involved in managing and operating the company
financing activities
cash borrowed on short term note, cash paid on long term note, cash received from issuing stock, dividends
the statement of cash flows reports
cash flows from operating, financing, and investing activities as well as significant non cash financing and investing activites
inventory turnover
cost of goods/average inventory
how productive a company is in using assets
efficiency
days' sales in inventory
ending inventory/ cost of goods sold then X 365
investing activities
equpiment
three of the most common tools for financial analysis are
horizontal, vertical, and ratio analysis
the appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is
investing activités
horizontal analysis
is a method used to evaluate changes in financial data across time
financial statement analysis
is the application of analytical tools to general purpose financial statements and related data for making business decisions, involves transforming accounting data into useful information for decision making, helps users to make better decisions, helps reduce uncertainty in decision making
acid test ratio
liquidity
current ratio
liquidity
the availablity of resources to meet short term requirements
liquidity
analyzing corporations with publicity traded stock
market prospects
dividend yield
market prospects
price earning ratio
market prospects
Accounts receivable turnover
net sales/average accounts receivable, net
total assest turnover
net sales/average total assets
which of the following items is reported on the statement of cash flows under financing activities
payment of cash dividend
the ability to provide financial rewards sufficient to attract and retain financing is called
profiability
basic earnings per share
profitability
book value per common share
profitability
gross margin ratio
profitability