Exam 3 Review Guide(1)-2 - Exam 3 Review Principles of...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Exam 3 Review- Principles of Accounting II Coverage: Appendix A: Financial Statement Analysis and budgeting chapters 9 and 12 Review for Appendix A: Financial Statement Analysis: 1. Complete the Exam 3 Take-home portion posted in Blackboard 2. What is meant by financial statement analysis? 3. Definitions of Vertical Analysis, Horizontal Analysis and Ratio Analysis 4. Definitions of Solvency (short-term and long-term) and Profitability 5. Understand how the ratios discussed support an evaluation of solvency and profitability 6. You do NOT need to memorize any FSA formulas FSA Example Multiple Choice: 1. Which of the following signifies that a company may be unable to pay its current liabilities if they suddenly become due? a. Low current ratio b. High current ratio c. High earnings per share d. Low gross profit percentage Answer: A Current ratio is a measure of short-term solvency, or a company’s ability to repay current liabilities (those debts due within a year). A low CR indicates that a company has less of its liquid assets available to repay current liabilities. 2. Earnings per share is used for which kind of evaluation? 3. The price/earnings ratio is used for which kind of evaluation?
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern