Matching Questions 119. Match each of the following terms with the appropriate definitions. 1. Solvency A statement with data for two or more successive accounting periods placed in...

1. Solvency

A statement with data for two or more successive accounting periods placed in side-by-side columns, often with changes shown in dollar amounts and percents.

2. Comparative financial statement

Examination of financial data across time.

3. Equity ratio

The availability of resources to meet short-term obligations and to efficiently generate revenues.

4. Common-size financial statement

The comparison of a company's financial condition and performance to a base amount.

5. Vertical analysis

The application of analytical tools to general-purpose financial statements and related data for making business decisions.

6. Market prospects

A company's ability to generate positive market expectations.

7. Horizontal analysis

A company's ability to cover long-term obligations.

8. Liquidity and efficiency

The portion of total assets provided by equity, computed as total equity divided by total assets.

9. Profitability

A company's ability to provide financial rewards sufficient to attract and retain capital.

10. Financial statement analysis

A statement where each amount is expressed as a percent of a base amount to reveal the relative importance of each financial statement item.