Ch 8 Financial Statement Analytics
Exam with Verified Detailed Answers
See LO on pg 1 -
financial statement analysis -
correct answer ✅-used by investors, analysts, auditors, and other
interested stakeholders to review and evaluate a company's
financial performance and statements
-allows the stakeholder to gain an understanding of the financial
health of the company to allow more insightful and effective
decision making
What are examples of descriptive financial analytics -
correct answer ✅ratio analysis
financial statement analysis
vertical and horizontal analysis
Which analytics will be most used by financial statement users? -
correct answer ✅-descriptive and diagnostic analytics to
understand the firm and identify trends and relationships among
different accounts
, Ch 8 Financial Statement Analytics
Exam with Verified Detailed Answers
Primary objective for descriptive analytics for financial statements -
correct answer ✅to set a benchmark to compare against a
company or portfolio of interest
ratio analysis -
correct answer ✅tool used to evaluate relationships among
different financial statement items to help understand a company's
financial and operating performance
-tells us how much of one account we get for a dollar of another
gross profit ratio -
correct answer ✅tell us how many cents wee have from every
dollar of sales that will cover operating expenses
Financial ratio analysis -
correct answer ✅key tool used by accounting, auditing, and
finance professionals to assess the financial health of a business
organization, to assess the reasonableness of reported financial
results, and to predict future performance
common size financial statement -
correct answer ✅type of financial statement that contains only
basic accounts that are common across companies
Exam with Verified Detailed Answers
See LO on pg 1 -
financial statement analysis -
correct answer ✅-used by investors, analysts, auditors, and other
interested stakeholders to review and evaluate a company's
financial performance and statements
-allows the stakeholder to gain an understanding of the financial
health of the company to allow more insightful and effective
decision making
What are examples of descriptive financial analytics -
correct answer ✅ratio analysis
financial statement analysis
vertical and horizontal analysis
Which analytics will be most used by financial statement users? -
correct answer ✅-descriptive and diagnostic analytics to
understand the firm and identify trends and relationships among
different accounts
, Ch 8 Financial Statement Analytics
Exam with Verified Detailed Answers
Primary objective for descriptive analytics for financial statements -
correct answer ✅to set a benchmark to compare against a
company or portfolio of interest
ratio analysis -
correct answer ✅tool used to evaluate relationships among
different financial statement items to help understand a company's
financial and operating performance
-tells us how much of one account we get for a dollar of another
gross profit ratio -
correct answer ✅tell us how many cents wee have from every
dollar of sales that will cover operating expenses
Financial ratio analysis -
correct answer ✅key tool used by accounting, auditing, and
finance professionals to assess the financial health of a business
organization, to assess the reasonableness of reported financial
results, and to predict future performance
common size financial statement -
correct answer ✅type of financial statement that contains only
basic accounts that are common across companies
