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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

14. What is the process of calculating and interpreting financial ratios to assess a company's performance called?

Vertical analysis

Ratio analysis

Horizontal analysis

Trend analysis

Previous problemNext problem

Verified step by step guidance

Understand the concept of financial ratios: Financial ratios are quantitative tools used to evaluate a company's financial performance and position by comparing various financial statement items.

Learn the purpose of ratio analysis: Ratio analysis involves calculating and interpreting financial ratios to assess aspects such as profitability, liquidity, efficiency, and solvency of a company.

Differentiate ratio analysis from other methods: Vertical analysis focuses on analyzing financial statement items as a percentage of a base figure, while horizontal analysis examines changes over time. Trend analysis identifies patterns or trends in financial data over multiple periods.

Recognize the application of ratio analysis: Ratio analysis is widely used by investors, creditors, and management to make informed decisions about a company's financial health and operational efficiency.

Conclude that the process described in the problem is ratio analysis, as it specifically involves calculating and interpreting financial ratios to assess performance.