Financial Statement Analysis

question 62

Multiple Choice

Financial statement analysis:

• A)is primarily used to identify account values that meet the normal standards.
• B)is limited to internal use by a firm's managers.
• C)provides useful information that can serve as a basis for forecasting future performance.
• D)provides useful information to shareholders but not to debt holders.
• E)is enhanced by comparing results to those of a firm's peers but not by comparing results to prior periods.

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Definitions:

Debt-To-Equity Ratio

A financial benchmark that shows the ratio between debt and shareholders' equity in asset financing.

Prepaying Bonds

The action of repaying the principal of a bond before its maturity date, often as a way to manage debt or save on interest costs.

Outstanding Bonds

Bonds issued by an entity that are currently not redeemed and are in the hands of investors.

Semiannual Interest

Interest that is calculated and paid twice a year on investments or loans.