Accounting Class 2 Test 3

Which two short-term liquidity ratios measure how frequently a company collects its accounts?

Days' sales uncollected Accounts receivable turnover

Profitability

ability to provide financial rewards sufficient to attracts and retain financing

Horizontal analysis

Comparison of a companies financial condition and performance across time.

Vertical analysis

Comparison of a company financial condition and performance to a base amount

GAAP

Generally Accepted Accounting Principles

Ratio Analysis

Measurement of key relations between financial statement items.

Comparative Balance Sheets

This is where you compare the assets percentage, compared to the total spent. (pg 692)

Which two ratios are key components in measuring a company's operating efficiency?

Total asset turnover Profit margin

solvency

ability to generate future revenues and meet long-term obligations.

Liquidity and efficiency

ability to meet short-term obligations and to efficiency generate revenues.