Accounting Chap 16
Short-term creditors are typically most interested in analyzing a company's
Liquidity
Which of the following is the most useful in analyzing companies of different sizes?
common-sized financial statements
Which of the following measures a company's ability to pay its current liabilities?
current ratio
Leverage implies that a company has
debt financing
In preparing the statement of cash flows, the correct order of reporting cash activities is financing, operating, and investing.
false
The independent auditor's report
gives the auditor's opinion regarding the fairness of the financial statements
One reason that a common-sized statement is a useful tool in financial analysis is that it enables the user to
make a better comparison of two companies of different sizes in the same industry
Horizontal analysis is a technique for evaluating financial statement data
over a period of time
The purpose of an audit is to
render an opinion on the fairness of the statements
Which of the following is required by the Sarbanes-Oxley Act?
report on internal control
An analysis in which all the components of an income statement are expressed as a percentage of sales is a
vertical analysis