A Common-Size Balance Sheet Helps Financial Managers Determine

question 68

Multiple Choice

A common-size balance sheet helps financial managers determine:

• A)which customers are paying on a timely basis.
• B)if costs are increasing faster or slower than sales.
• C)if changes are occurring in a firm's mix of assets.
• D)if a firm is generating more or less sales per dollar of assets than in prior years.
• E)the rate at which the firm's dividend payout is changing.

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Definitions:

EDGAR

Stands for Electronic Data Gathering, Analysis, and Retrieval system, a database maintained by the U.S. Securities and Exchange Commission for corporate filings.

Automated Collection

The use of computerized systems to gather debts or receivables efficiently, often used by financial institutions and collection agencies.

Short-swing Profits Rule

A regulation intended to prevent insider trading by requiring company insiders to return any profits made from the purchase and sale of company stock within a six-month period.

1934 Act

The Securities Exchange Act of 1934, which governs the trading of securities in the U.S., establishes the Securities and Exchange Commission (SEC), and mandates reporting by publicly traded companies.