Which statement is true:

Which statement is true:

a. Financial analysis is the use of financial statements to analyze a company's financial position and performance.
b. Financial analysis is the use of balance sheet to analyze a company's financial position and performance, and to assess future performance.
c. Financial analysis is the use of income statement and balance sheet to analyze a company's financial position and performance, and to assess future performance.
d. Financial analysis is the use of financial statements to analyze a company's financial position and performance, and to assess future performance.

Answer: D

In indirect method, the net income figure from the income statement is used to calculate the amount of net cash flow from operating activities because:

In indirect method, the net income figure from the income statement is used to calculate the amount of net cash flow from operating activities because:

a. the income statement is prepared on accrual basis in which revenue is recognized when earned and not when received
b. the income statement is prepared on cash basis in which revenue is recognized when earned and not when received
c. the cash flow statement is prepared on accrual basis in which revenue is recognized when earned and not when received
d. the cash flow statement is prepared on cash basis in which revenue is recognized when earned and not when received

Answer: A

Which statement is true:

Which statement is true:

a. Liquidity refers to the ability of a company to meets its long-term (and current) obligations.
b. Profitability refers to the ability of a company to meets its long-term (and current) obligations.
c. Efficiency refers to the ability of a company to meets its long-term (and current) obligations.
d. Solvency refers to the ability of a company to meets its long-term (and current) obligations.

Answer: D

Major noncurrent assets include:

Major noncurrent assets include:

a. Property
b. All of these
c. Equipment
d. Investments

Answer: B

It is an indicator of a company's ability to meet financial obligations

It is an indicator of a company's ability to meet financial obligations

a. Liquidity
b. Solvency
c. Profitability
d. Efficiency

Answer: A

Major current assets include:

Major current assets include:

a. cash and cash equivalents
b. marketable securities
c. all of these
d. derivative financial instruments

Answer: C