Financial Statement Analysis

What is ratio analysis?

• Ratio analysis is a method of analyzing and interpreting non-financial data to evaluate a company's performance.

• Ratio analysis is a method of analyzing and interpreting financial statements to evaluate a company's marketing strategies.

• Ratio analysis is a method of analyzing and interpreting financial statements to evaluate a company's stock price.

• Ratio analysis is a method of analyzing and interpreting financial statements to evaluate a company's performance and financial health.

What are the different types of ratios used in financial statement analysis?

• liquidity ratios, profitability ratios, solvency ratios, and efficiency ratios

• liquidity ratios, profitability ratios, efficiency ratios, and market ratios

• income ratios, expense ratios, debt ratios, and turnover ratios

• current ratios, quick ratios, leverage ratios, and activity ratios

How is the cash flow statement different from the income statement?

• The cash flow statement shows the net income or loss, while the income statement shows the cash inflows and outflows.

• The cash flow statement shows the revenues and expenses, while the income statement shows the inflows and outflows of cash.

• The cash flow statement shows the assets and liabilities, while the income statement shows the revenues and expenses.

• The cash flow statement shows the inflows and outflows of cash during a specific period, while the income statement shows the revenues, expenses, and net income or loss for a specific period.

What does the cash flow statement show?

• The cash flow statement shows the revenue and expenses of a company.

• The cash flow statement shows the inflow and outflow of cash in a company over a specific period of time.

• The cash flow statement shows the total assets and liabilities of a company.

• The cash flow statement shows the market value of a company's stock.

What is the purpose of an income statement?

• To track the company's stock prices and market value.

• To calculate the company's total assets and liabilities.

• To determine the company's customer satisfaction and loyalty.

• To provide a summary of a company's revenues, expenses, and net income over a specific period of time.

What are the components of an income statement?

• assets, liabilities, and equity

• cash flow from operating activities, investing activities, and financing activities

• revenue, expenses, gains, and losses

• balance sheet, statement of cash flows, and statement of retained earnings

What is the balance sheet?

• The balance sheet is a report that shows a company's revenue and profit.

• The balance sheet is a statement that displays a company's cash flow and investments.

• The balance sheet is a document that lists all the expenses of a company.

• The balance sheet is a financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time.

What information does the balance sheet provide?

• The balance sheet provides information about a company's financial position.

• The balance sheet provides information about a company's customer satisfaction levels.

• The balance sheet provides information about a company's employee salaries.

• The balance sheet provides information about a company's marketing strategies.

What are the different methods used in financial statement analysis?

• qualitative analysis, quantitative analysis, regression analysis

• income statement analysis, balance sheet analysis, statement of cash flows analysis

• vertical analysis, horizontal analysis, cash flow analysis

• ratio analysis, trend analysis, comparative analysis, and common size analysis

How can financial statement analysis help in decision making?

• Financial statement analysis is not useful in decision making.

• Financial statement analysis is too complex and time-consuming to be useful in decision making.

• Financial statement analysis only provides historical data and is not relevant for decision making.

• Financial statement analysis provides insights into a company's financial performance and helps stakeholders make informed decisions.