Lesson 2 activity

Question 1

Which financial statement shows the operating performance of a company?

Answer 1

statement of profit or loss

Question 2

Which financial statement shows the liquidity position of a company?

Answer 2

statement of financial position

Question 3

Which of the following is classified as investing cash flows?

A. Payment of salaries to employees

B. Collection of accounts receivable

C. Proceeds from the sale of property, plant, and equipment

D. Payment of loans

Answer 3

c

Question 4

What analysis involves all accounts from the statement of financial position are presented as a percentage of total assets, while all accounts in the statement of profit or loss are presented
as a percentage of net sales?

Answer 4

vertical analysis

Question 5

. What financial ratios measure the ability of a company to pay maturing obligations?

Answer 5

liquidity ratios

Question 6

What financial ratio measures the ability of a company to generate revenues for every peso of
asset found in the statement of financial position?

Answer 6

total asset turnover

Question 7

What financial ratio measures the efficiency of a company in managing the accounts due from
its customers?

Answer 7

accounts receivable turnover ratio

Question 8

What financial ratios measure the operating performance of a company which includes
returns to investors?

Answer 8

Profitability ratios

Question 9

What financial ratios measure how the assets of a company are financed?

Answer 9

Leverage or stability ratios

Question 10

What is the period that measures the length of time it takes a company to complete a cycle
from acquiring raw materials or merchandise to collecting receivables?

Answer 10

Operating cycle