Financial Statement Analysis Flashcards
1
Q
Describe a statement of cash flows
A
A summary of the sources and uses of cash over a specified period
2
Q
Common Size Statements VS Common Base year statements
A
Common size statements present all items in percentage terms while common base year statements present all items relative to a specified base year amount
3
Q
Identify the Financial Ratios
As mentioned in McGraw Hill
A
- Short-term solvency or liquidity ratios
- Long-term solvency or financial leverage ratios
- Asset management or turnover ratios
- Profitability ratios
3
Q
Define the DuPont Identity as an equation
A
Return on Equity = Net income / Total Equity
3
Q
Idnetify the benchmarks for evaluating a firm’s financial statements
A
- Time Trend Analysis
- Peer Group Analysis
Examples of PGA are
1. Standard Industrial Classification (SIC)
2. North American Inddustry Classification System (NAICS)
