Chapter 2
Financial Statements and Analysis
Learning Goals
1.
Review the contents of the stockholders’ report and the procedures for consolidating international
financial statements.
2.
Understand who uses financial ratios, and how.
3.
Use ratios to...
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Chapter 2
Financial Statements and Analysis
Learning Goals
1.
Review the contents of the stockholders’ report and the procedures for consolidating international
financial statements.
2.
Understand who uses financial ratios, and how.
3.
Use ratios to analyze a firm’s liquidity and activity.
4.
Discuss the relationship between debt and financial leverage and the ratios used to analyze a firm’s
debt.
5.
Use ratios to analyze a firm’s profitability and market value.
6.
Use a summary of financial ratios and the DuPont System of analysis to perform a complete ratio
analysis.
True/False
1.
The Financial Accounting Standards Board (FASB) is the federal regulatory body that governs the
sale and listing of securities.
Answer: FALSE
Level of Difficulty: 1
Learning Goal: 1
Topic: Accounting Standards and Regulation
2.
GAAP is the accounting profession’s rule-setting body.
Answer: FALSE
Level of Difficulty: 1
Learning Goal: 1
Topic: Accounting Standards and Regulation
3.
Genera
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