Chapter 7-1 Accounting Vocabulary
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Financial Ratio
A comparison between two components of financial information
Vertical Analysis
Reporting an amount on a financial statement as a percentage of another item on the same financial statement
Financial Accounting
The area of accounting that focuses on reporting information to external users
Managerial Accounting
The area of accounting that focuses on reporting information to internal users
Ratio Analysis
The calculation and interpretation of a financial ratio
Return On Sales (ROS)
The ratio of net income to total sales
