A report of a company's financial worth in terms of book value. It is broken into three parts to include a company’s assets, liabilities, and shareholders' equity.

Breaks down the revenue a company earns against the expenses involved in its business to provide a bottom line, net income profit or loss.

Stockholders' equity refers to the assets remaining in a business once all liabilities have been settled.

A negative stockholders' equity may indicate an impending bankruptcy.

Provides an overview of the company's cash flows from operating activities, investing activities, and financing activities.

Financial statement fraud is the manipulation of the information used to prepare the financial statements released to the public and financial institutions.

Financial statement analysis is the process of analyzing a company's financial statements for decision-making purposes.

A method of financial statement analysis in which each line item is listed as a percentage of a base figure within the statement.

A financial statement analysis method which compare historical data, such as ratios, or line items, over a number of accounting periods.

A ratio to determine the efficiency of managing assets in generating revenue.

A ratio that measures the amount of debt that a company uses to buy more assets. An excessive ratio increases the risk of failure, since it becomes more difficult to repay debt.

A ratio that measures the ability of the company to meet financial obligations as they come due, without disrupting the normal ongoing operations.

A ratio that measures the extent to which a company generates a profit. This analysis focuses on the relationship between revenues and expenses and on the level of profits relative to the size of investment in the business.

This ratio shows how well a company can convert its investment in assets into profits.

Benchmarking is the continuous process of measuring products, services, and practices against the toughest competitors or those companies recognized as industry leaders

This ratio shows how quickly the firm can pay off its liabilities relative to cash, bank balances and marketable securities since these are considered as the most liquid component of the current assets.

Profit or loss is defined as "the total of income less expenses, excluding the components of other comprehensive income".

Current assets are assets that are except:

Current liabilities are those that are except:

The line items to be included on the face of the statement of financial position are except:

The following minimum line items must be presented in the profit or loss section except:

a. The notes must to financial statements present information about the basis of preparation of the financial statements and the specific accounting policies used

b. The notes disclose any information required by IFRSs that is not presented elsewhere in the financial statements and

c. The notes provide additional information that is not presented elsewhere in the financial statements but is relevant to an understanding of any of them

This ratio measures the proportion of assets paid for with debt.

Leverage ratios includes the following except:

Which of the following statement is false?

a. Horizontal analysis is used in the review of a company's financial statements over multiple periods.

b. Horizontal analysis usually depicts percentage growth over the same line item in the base year.

c. Horizontal analysis does not allow financial statement users to easily spot trends and growth patterns.

Which of the following statement on vertical analysis is false?

a. For the Statement of Financial Position the divisor is Total Liabilities

b. For the Statement of Comprehensive Income the divisor is Net Sales(Revenue)

c. For the Cash Flow Statement the divisor is the total cash inflows

Limitations on the use of financial statement includes the following except:

Several techniques are commonly used as part of financial statement analysis. Three of the most important techniques include horizontal analysis, vertical analysis, and ratio analysis.

The objective of IAS 1 (2007) is to prescribe the basis for presentation of general purpose financial statements, to ensure comparability both with the entity's financial statements of previous periods and with the financial statements of other entities.