Define these terms: financial statement, balance sheet, income statement, ratio analysis. Describe four types of financial ratios and explain the use of each.
What will be an ideal response?
Financial statement: a summary of some aspect of an organization's financial status.
Balance sheet: a summary of an organization's overall financial worth (assets and liabilities) at a specific point in time.
Income statement: a summary of an organization's financial results (revenues and expenses) over a specified period of time.
Ratio analysis: the practice of evaluating financial ratios, such as:
Liquidity ratio: how easily an organization's assets can be converted into cash.
Debt management ratio: how easily an organization can meet its long-term financial obligations.
Asset management ratio: how effectively an organization is managing its assets.
Return ratios: return on investment or return on equity; how effective management is generating a return, or profits, on its assets.
You might also like to view...
Which of the following cash budget equations is incorrect?
A. Period one ending cash balance = period two beginning cash balance B. Cash payments + cash receipts = cash requirements C. Beginning cash + cash receipts = total cash available D. Cash payments + cash cushion = total cash needed
In sampling, an incident is the object or person about which or from which the information is desired
Indicate whether the statement is true or false
The distinct competency of a retailer relative to its competitors is referred to as _____
a. economies of scale b. its cost advantage c. a focused strategy d. its competitive advantage
As Adam Smith's laissez-faire philosophy gained popularity in the eighteenth and nineteenth centuries, the freedom-to-contract doctrine evolved through case law out of our federal court system
Indicate whether the statement is true or false