The Dollar Change and Percentage Change in the Accounts Receivable

question 26

Multiple Choice

The dollar change and percentage change in the accounts receivable account from 2013 to 2014 is calculated for Allison Corporation.This is an example of

• A)horizontal analysis
• B)vertical analysis
• C)profitability analysis
• D)solvency assessment

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Definitions:

Current Liabilities

Short-term financial obligations that are due within one year or within a normal operating cycle.

Quick Ratio

A liquidity metric that indicates a company's ability to cover its current liabilities without selling inventory, calculated as (cash plus marketable securities plus accounts receivable) divided by current liabilities.

Temporary Investments

Short-term investments that a company plans to convert into cash within a short period, typically one year or less.

Remote Contingent Liability

A potential financial obligation that is considered to be unlikely to occur; it is noted in financial statements as a footnote to provide full disclosure.