Ch2/3 Financial Statement Analysis

Question 1

GAAP

Answer 1

Generally Accepted Accounting Principles - differ from country to country

Question 2

What is a Financial Statement

Answer 2

Accounting reports issued by a firm periodically

Question 3

Balance Sheet

Answer 3

snapshot of the firms financial position -> Assets = Liabilities + Equity

Question 4

Market-to-Book ratio

Answer 4

(Market Value of Equity) / (Book Value of Equity)

Question 5

Debt-Equity Ratio

Answer 5

(Total Debt) / (Total Equity)

Question 6

Enterprise value

Answer 6

Market Value of Equity + Debt - Cash
Assesses the value of underlying business assets separate from cash

Question 7

Income Statement (PNL)