1.

Financial statement analysis involves all of the following except:

Multiple Choice

• The application of analytical tools to general-purpose financial statements and related data for making business decisions.

• Transforming accounting data into useful information for decision-making.

• Helping users to make better decisions.

• Helping to reduce uncertainty in decision-making.

• Assuring that the company will be more profitable in the future.

2

The building blocks of financial statement analysis do not include:

Multiple Choice

• External analyst services.

• Solvency.

• Profitability.

• Market prospects.

• Liquidity and efficiency.

3

The ability to meet short-term obligations and to efficiently generate revenues is called:

Multiple Choice

• Liquidity and efficiency.

• Solvency.

• Profitability.

• Market prospects.

• Creditworthiness.

4

The ability to generate future revenues and meet long-term obligations is referred to as:

Multiple Choice

• Liquidity and efficiency.

• Solvency.

• Profitability.

• Market prospects.

• Creditworthiness.

5

The ability to provide financial rewards sufficient to attract and retain financing is called:

Multiple Choice

• Liquidity and efficiency.

• Solvency.

• Profitability.

• Market prospects.

• Creditworthiness.