Quiz Ch 12 – T/F Considerations for Effective Benchmarking in Business
Financial Accounting
Thomas, Tietz, and Harrison
12th Edition
Comparing common size variables through benchmarking is meaningful only when companies are of similar sizes.
Comparing common size variables through benchmarking is meaningful only when companies are of similar sizes.
A 10% decrease occurred in sales from 2019 to 2020 for a company with $250 in sales in 2019 and $225 in sales in 2020.
There was a 50% increase in sales from 2018 to 2019 for a company with $150 in sales in 2018 and $225 in sales in 2019.
Income statement trend analysis is commonly utilized for future forecasting.
In horizontal analysis, a financial statement line item is compared between the current and prior year.
The quick ratio’s numerator comprises cash, short-term investments, and net current receivables.
Accounting information should illustrate how a company’s implementation of a particular business strategy has affected its performance.
The business section of a company’s annual report offers crucial details about its products, marketing and advertising techniques, sales and distribution tactics, product design and development, quality assurance in manufacturing, and inventory management.
Vertical analysis is exemplified by the ratio of the dollar amount of each individual asset to the dollar amount of total assets.
The horizontal analysis employs trend percentages.