Select the term from the list provided that best matches each of the following descriptions or definitions:Your AnswerDefinition or DescriptionTerm?A. An indication of the relative importance of an item of financial information1. Absolute amounts?B. Analysis technique that compares amounts of the same item over two or more time periods2. Book value per share?C. Measures of the long-term debt paying ability of the firm3. Current ratio?D. Measure of profitability calculated by dividing net income by average total stockholder's equity4. Horizontal analysis?E. Dollar amounts of individual items on financial statements can be misleading because they make no reference to the size of the company5. Liquidity ratios?F. Measurements of a firm's ability to generate income6.
Materiality?G. Current assets divided by current liabilities7. Average days to sell inventory?H. Measures of short-term debt paying ability8. Price-earnings ratio?I. Measure to compare values of different stocks, calculated by dividing market price per share by amount of income per share9. Profitability ratios?J. Another way at looking at inventory turnover by converting the inventory turnover ratio into a number of days10. Return on equity?K. Calculated by dividing total stockholder's equity less preferred rights by the number of common shares outstanding11. Solvency ratios
What will be an ideal response?
| Your Answer | Definition or Description | Term |
| 6 | A. An indication of the relative importance of an item of financial information | 1. Absolute amounts |
| 4 | B. Analysis technique that compares amounts of the same item over two or more time periods | 2. Book value per share |
| 11 | C. Measures of the long-term debt paying ability of the firm | 3. Current ratio |
| 10 | D. Measure of profitability calculated by dividing net income by average total stockholder's equity | 4. Horizontal analysis |
| 1 | E. Dollar amounts of individual items on financial statements can be misleading because they make no reference to the size of the company | 5. Liquidity ratios |
| 9 | F. Measurements of a firm's ability to generate income | 6. Materiality |
| 3 | G. Current assets divided by current liabilities | 7. Average days to sell inventory |
| 5 | H. Measures of short-term debt paying ability | 8. Price-earnings ratio |
| 8 | I. Measure to compare values of different stocks, calculated by dividing market price per share by amount of income per share | 9. Profitability ratios |
| 7 | J. Another way at looking at inventory turnover by converting the inventory turnover ratio into a number of days | 10. Return on equity |
| 2 | K. Calculated by dividing total stockholder's equity less preferred rights by the number of common shares outstanding | 11. Solvency ratios |
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