Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

14. Financial Statement Analysis

Introduction to Ratios

Financial Accounting

14. Financial Statement Analysis

Introduction to Ratios

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Multiple Choice

Which of the following is NOT a category of financial statement ratios?

Solvency ratios

Inventory costing ratios

Liquidity ratios

Profitability ratios

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Verified step by step guidance

Understand the concept of financial statement ratios: Financial statement ratios are tools used to analyze a company's financial performance and position. They are categorized into specific groups based on the type of analysis they provide.

Review the common categories of financial statement ratios: These typically include solvency ratios (assessing long-term financial stability), liquidity ratios (measuring short-term financial health), and profitability ratios (evaluating the ability to generate profit).

Identify the term 'Inventory costing ratios': Inventory costing ratios are not a standard category of financial statement ratios. Instead, they relate to inventory management and costing methods, such as FIFO (First-In, First-Out) or LIFO (Last-In, First-Out), which are accounting methods rather than financial statement ratio categories.

Compare the options provided: Solvency ratios, liquidity ratios, and profitability ratios are established categories of financial statement ratios, while inventory costing ratios do not fit into this classification.

Conclude that 'Inventory costing ratios' is NOT a category of financial statement ratios, as it pertains to inventory accounting methods rather than financial performance analysis.