Rather Than Looking Only at the Balances Reported on the Financial

question 15

Multiple Choice

Rather than looking only at the balances reported on the financial statements,it is helpful to look at the changes in the account balances over time.This is called

• A)Common analysis.
• B)Vertical analysis.
• C)Horizontal analysis.
• D)Benchmarking

---

Definitions:

Fixed Asset Turnover Ratio

A financial metric that measures how efficiently a company uses its fixed assets to generate sales.

Net Income

The financial gain a company realizes after all deductions, including taxes and costs, are taken from revenue.

Total Assets

The sum of all assets owned by an individual or organization, including cash, investments, property, and other valuables, representing the total resources available for use in generating future income.

Total Asset Turnover

A financial efficiency ratio that measures how effectively a company uses its assets to generate sales revenue.