When performing a horizontal analysis, what does the "earlier year" refer to?

Initial period

Payback period

Interest period

Base period

When performing a horizontal analysis, what does an increase of 100% signify?

The amounts have changed to half of the previous year

A 100% increase is not possible using horizontal analysis

The amounts have doubled from the previous year

The amounts have stayed the same from the previous year

Why is horizontal analysis used?

To determine the difference between revenues and expenses

To determine cash flows from one year to the next

To determine the difference between assets and liabilities

To determine a percentage change from one year to the next

Sara's Cake Company had sales last year of $125,000 with expenses of $75,000. This year, the company had sales of $165,000 with expenses of $95,000. Perform a trend analysis to see the change percentage on the sales that have occurred.

75%

150%

76%

132%

Sara's Cake Company is looking at the amount of cash it will have to cover its rent in the coming months. Which type of ratios examine a firm's ability to cover its upcoming bills?

Market measure ratios

Profitability ratios

Leverage ratios

Liquidity ratios

Sara's Cake Company is looking at assets versus liabilities for this year. Which type of analysis involves looking at individual areas within a specific statement?

Hybrid analysis

Vertical analysis

Industry analysis

Horizontal analysis

Sara's Cake Company is looking at how much debt they have compared to total equity. If they have total assets of $100,000, total liabilities of $32,000 and total stockholder's equity of $68,000. What is the debt-to-equity ratio here?

47%

100%

68%

32%

Sara's Cake Company is looking to review more information about cake baking industry statistics. Which of the following is a good resource for finding information about industry data?

Trade journals

US Census Bureau

Newspapers

The Internet

In preparing a common-size balance sheet, you express all account balances as a percentage of___________.

Total stockholders' equity

Total assets

Total liabilities

Total assets plus total liabilities minus stockholders' equity

The difference between a firm's current assets and its current liabilities is__________.

Current ratio

Cash flow

Short term capital

Working capital