Solved

Match Each Definition That Follows with the Term It Defines

Question 208

Matching

Match each definition that follows with the term it defines.

Premises:
a percentage analysis of increases and decreases in related items on comparative financial statements
use debt to increase the return on an investment
an analysis of a company’s ability to pay its current liabilities
the percentage analysis of the relationship of each component in a financial statement to a total within the statement
a company's ability to make interest payments and repay debt at maturity
focuses on a company’s ability to generate net income
useful for comparing one company to another or to industry averages
measures the risk that interest payments will not be made if earnings decrease
Responses:
solvency
leverage
times interest earned
horizontal analysis
vertical analysis
common-sized financial statements
current position analysis
profitability analysis

Correct Answer:

a percentage analysis of increases and decreases in related items on comparative financial statements
use debt to increase the return on an investment
an analysis of a company’s ability to pay its current liabilities
the percentage analysis of the relationship of each component in a financial statement to a total within the statement
a company's ability to make interest payments and repay debt at maturity
focuses on a company’s ability to generate net income
useful for comparing one company to another or to industry averages
measures the risk that interest payments will not be made if earnings decrease
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