FABM FINAL TERMS

What is the main purpose of horizontal analysis?

• To compare financial statements of different companies.

• To evaluate a series of financial statements data over a period of time.

• • To measure the liquidity of a firm.

• To calculate the ratio of debt to equity.

In horizontal analysis, changes are measured against what?

• The industry average.

• The most recent year.

• A base year.

• A competitor's financial data.

Vertical analysis expresses each item in a financial statement as a percent of what?

• Total assets.

• Net income.

• A base amount.

• Equity.

Ratio analysis expresses the relationship among what?

• All assets and liabilities.

• Selected items of financial statement data.

• Revenues and expenses.

• Different financial statements.

What is a financial ratio?

• A comparison in fraction, proportion, decimal or percentage of two significant figures from the financial statements.

• A comparison between two different companies.

• A fixed percentage of net income.

• A measure of total equity.

Financial ratio analysis provides insights into which aspects of a firm?

• Marketing strategies and customer satisfaction.

• Profitability of operations and financial condition.

• Employment rates and employee satisfaction.

• Market share and competitive position.

What do liquidity ratios measure?

• Firm's ability to meet long-term obligations.

• Firm's ability to meet current obligations.

• Firm's efficiency in utilizing assets.

• Firm's profitability.

Activity ratios reflect what?

• Firm’s ability to meet current obligations.

• Firm’s efficiency in utilizing the assets.

• Firm’s proportion of debt and equity.

• Firm’s overall performance.

Leverage ratios show the proportion of what?

• Short-term assets to long-term assets.

• Revenues to expenses.

• Debt and equity in financing the firm’s assets.

• Current liabilities to total liabilities.

Profitability ratios measure what?

• The liquidity of the firm.

• The efficiency in utilizing assets.

• Overall performance and effectiveness of the firm.

• The proportion of debt in the firm's capital structure.