Indirect method:Reports net income and then adjusts it for items that do not affect cash. Indirect method only affects the presentation of operating cash flows, not investing or financing sections.

True

False

General-purpose financial statements:Include the (1) income statement, (2) balance sheet, (3) statement of stockholders' equity (or statement of retained earnings), (4) statement of cash flows, and (5) notes to these statements.

True

False

Market Prospects:Ability to provide financial rewards to attract and retain financing.

True

False

Dollar change formula:Dollar change = Analysis period amount Base period amount

True

False

Trend analysis:Computing trend percents that show patterns in data across periods.

True

False

Debt-to-equity is a profitability ratio.

True

False

Horizontal Analysis:Ability to meet short-term obligations and efficiently generate revenues.

True

False