Question

Following are definitions or descriptions of terms relating to ratio analysis.
(1) Involves studying the relationship between two or more financial statement items
(2) Indicates the amount that investors are willing to pay for each $1 of a company’s earnings over the past 12 months
(3) Involves a compare is on of a company’s financial ratios with those of competing companies or industry norms
(4) Measures a firm’s ability to generate sales relative to its investment in assets
(5) Focuses on changes in a firm’s ratios over a period of time
(6) Indicates how the capital markets as a whole perceive a company’s common stock
(7) Indicates the percentage of each sales dollar that contributes to net income
(8) Measures a firm’s ability to pay its current liabilities without relying on the sale of its inventory
(9) Indicates how well a company is managing its assets
(10) Indicates the number of times that a firm sells or turns over its inventory each year
(11) Measures a firm’s ability to pay its current liabilities from its current assets
Required:
Match each definition or description listed with an appropriate term from the following list:
(a) Ratio analysis
(b) Inventory turnover ratio
(c) Total asset turnover ratio
(d) Cross-sectional ratio analysis
(e) Current ratio
(f) Profit margin percentage
(g) Longitudinal ratio analysis
(h) Leverage ratio
(i) Market strength ratio
(j) Quick ratio
(k) Price-earnings ratio


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  • CreatedMarch 27, 2015
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