1 point Some have argued that analyzing balance sheet items are more important than income statement items. Which of the following could be a reason for this? * The income statement is a poor tool for analyzing current transactions, while the balance sheet is better at this. Profitability ratios use items from the balance sheet and profitability is the most important issue The balance sheet is a better measure of cash flow. The balance sheet is a collection of all transactions, past and present, while the income statement only reflects the most recent events. 1 point A comparison of the amounts for the same item in financial statements of two or more periods is called * Vertical analysis. Horizontal analysis Earnings per share. O Return on total assets. 1 point Leverage is* The ability to pay current debts when they come due. Also called profit margin The ability to earn a satisfactory return on the investments in the business. O The proportion of debt to stockholders' equity. When reviewing a credit application, the credit manager should 1 point be most concerned with the applicant company's Price-earnings ratio and current ratio. O Profit margin and return on assets. O Working capital and return on equity. Working capital and current ratio. 1 point An expression of the amount of each item in a statement as a percentage of some designated total for comparative purposes is called * O Vertical analysis. Return on total assets. O Earnings per share. O Horizontal analysis