The Tools of Effective Financial Statement Analysis Are Useful for Assessing

question 28

Short Answer

The tools of effective financial statement analysis are useful for assessing whether to extend ____________________ to a firm,either for a short-term or for a long-term.

---

Definitions:

Personal Assets

Items of value owned by an individual, including real estate, bank accounts, investments, and personal property.

Objectivity Principle

The objectivity principle in accounting states that financial information presented in the accounts of a business should be based on objective evidence and be verifiable, avoiding personal opinions or biases.

External Users

individuals or entities outside of a company who use its financial information, such as investors, creditors, and government agencies.

Shareholders

Individuals or entities that own a portion of a corporation's stock, thus having a share in its ownership and profits.