Vertical and Horizontal Analysis

Financial statement analysis uses computational and analytical techniques to evaluate company’s risk, performance and financial health.

• True

• False

Horizontal analysis can be performed with the Statement of Financial Position and Statement of Comprehensive Income

• True

• False

A common-size Statement of Comprehensive Income that shows cost of goods sold at 45% means that the cost of goods sold is 45% of sales.

• True

• False

It is the ability of an entity to earn income over a period of time.

• Liquidity

• Profitability

• Solvency

• Stability

It is the ability of an enterprise to pay currently maturing obligations and meet unexpected cash needs.

• Solvency

• Stability

• Liquidity

• Profitability

It measures the ability of an entity to survive over a long period of time. refers to the company’s capacity to pay their long-term liabilities

• Solvency

• Stability

• Liquidity

• Profitability

If current assets are ₱270,000 and total assets are ₱810,000, what percentage of total assets are current assets?

• 33%

• 3.5%

• 30%

• 25%

A firm has liabilities of ₱30,000 and owner’s capital of ₱90,000. The percentage of total liabilities to total assets is

• 70%

• 25%

• 50%

• 20%

A firm had owner’s capital of ₱150,000 in 2013 and ₱187,500 in 2013. The increase in owner’s capital from 2013 to 2014 is

• 125%

• 25%

• 50%

• 12.5%

If long-term liabilities are ₱300,000 and total assets are ₱2,100,000, what percentage of total assets are long-term liabilities?

• 7%

• 16.7%

• 12.5%

• 14.3%