Match Each Definition That Follows with the Term (A-H) It

question 17

Multiple Choice

Match each definition that follows with the term (a-h) it defines.
-A company's ability to make interest payments and repay debt at maturity

• A)Solvency
• B)Leverage
• C)Times interest earned
• D)Horizontal analysis
• E)Vertical analysis
• F)Common-sized financial statements
• G)Current position analysis
• H)Profitability analysis

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Definitions:

Indirect Method

A approach used in cash flow statements to adjust net income for changes in non-cash accounts to determine net cash from operating activities.

Operating Activities

Operating activities include the primary revenue-generating activities of an organization as reflected in its cash flow.

Inventory Account

An account representing the total cost of all unsold goods held by a company, including raw materials, work-in-progress, and finished goods.

Depreciation Expense

The distribution of a physical asset's cost over its lifespan, which mirrors the reduction in its value as time progresses.