Which of the Following Statements Is Most Correct

question 4

Multiple Choice

Which of the following statements is most correct?

• A)Common-size financial income statements provide information about major sources and uses of cash.
• B)Companies with the highest sales growth will have the fewest liquidity problems.
• C)Pro forma statements are the same as common-size statements.
• D)The more efficiently a company manages its working capital the greater its liquidity, all else equal.

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Definitions:

Statement Of Owner's Equity

A financial statement that shows the changes in the ownership interest of a company over a period of time.

Balance Sheet

A balance sheet is a financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Income Statement

A financial statement that reports a company's revenues and expenses over a specific period, resulting in a net profit or loss.

Asset Section

The asset section is part of a balance sheet that lists all assets owned by a company, including current, fixed, and intangible assets.