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Unformatted text preview: Sustainable income is equal to actual net income. False Horizontal analysis is a technique for evaluating several companies over time. False Vertical analysis is a technique for evaluating financial statement data by expressing each item in a financial statement as a percent of a base amount. True Solvency ratios measure a company's ability to pay its currently maturing obligations. False Profitability ratios provide information about a firm's success in generating income from operations. True The price-earnings ratio allows investors to make a meaningful evaluation of market values and earnings across firms. True Pro forma income includes unusual and nonrecurring items. False Which of the following is not an irregular item on the income statement? Other revenues and expenses Which of the following would be considered a disposal of a significant component of a business? Elimination of a major class of customers Extraordinary items are reported on the income statement immediately: after discontinued operations Which of the following would not be considered an extraordinary item? Losses attributable to a labor Which of the following would not be considered an extraordinary item?...
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- Spring '11