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Match Each of the Following Terms with the Appropriate Definitions

Question 184

Matching

Match each of the following terms with the appropriate definitions.

Premises:

Responses:

Gross margin ratio

A company's ability to cover long-term obligations.

Debt ratio

A statement where each amount is expressed as a percent of a base amount to reveal the relative importance of each financial statement item.

Return on common stockholders' equity

A company's ability to generate positive market expectations.

Dividend yield

Examination of financial data across time.

Profit margin ratio

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

Total asset turnover

The availability of resources to meet short-term obligations and to efficiently generate revenues.

Times interest earned

A company's ability to provide financial rewards sufficient to attract and retain capital.

Days' sales uncollected

A statement with data for two or more successive accounting periods placed in side-by-side columns, often with changes shown in dollar amounts and percents.

Days' sales in inventory

The comparison of a company's financial condition and performance to a base amount.

Inventory turnover

The portion of total assets provided by equity, computed as total equity divided by total assets.

Premises:

Gross margin ratio

Debt ratio

Return on common stockholders' equity

Dividend yield

Profit margin ratio

Total asset turnover

Times interest earned

Days' sales uncollected

Days' sales in inventory

Inventory turnover

Responses:

A company's ability to cover long-term obligations.

A statement where each amount is expressed as a percent of a base amount to reveal the relative importance of each financial statement item.

A company's ability to generate positive market expectations.

Examination of financial data across time.

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

The availability of resources to meet short-term obligations and to efficiently generate revenues.

A company's ability to provide financial rewards sufficient to attract and retain capital.

A statement with data for two or more successive accounting periods placed in side-by-side columns, often with changes shown in dollar amounts and percents.

The comparison of a company's financial condition and performance to a base amount.

The portion of total assets provided by equity, computed as total equity divided by total assets.

Correct Answer:

Premises:

Responses:

Gross margin ratio

Debt ratio

Return on common stockholders' equity

Dividend yield

Profit margin ratio

Total asset turnover

Times interest earned

Days' sales uncollected

Days' sales in inventory

Inventory turnover