Chapter 8 Financial Statement Analysis Exam Questions & Answers (Grade A+).docx

Chapter 8: Financial Statement
Analysis Exam Questions & Answers
(Grade A+)
financial analysis -
correct answer ✅process of studying a set of individuals or
organizations financial data


balance sheet -
correct answer ✅SNAPSHOT of a company's financial position at
given point in time.


income statement & statement of cash flows -
correct answer ✅measures of financial performance over a past
PERIOD of time.


who are the analyzers? -
correct answer ✅-internal users: managers use them as starting
point for planning


-lenders: use financial statements to assess the likelihood of DEBTS
BEING REPAID


-stockholders:

, Chapter 8: Financial Statement
Analysis Exam Questions & Answers
(Grade A+)
-competitors: finance used to analyze rivalry


Common Stock -
correct answer ✅convert the currency values shown on income
statement & balance sheet into percentages


Vertical Common Size -
correct answer ✅all items are transformed into a percent of
revenue.


Income Statement: divided by TOTAL REVENUE or SALES


Balance Sheet: divided by TOTAL ASSETS


Horizontal Common Size -
correct answer ✅calculate the percent change in various income
statement and balance sheet accounts over time.


(2012-2011)/(2011)