(See related pages)
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| Capital structure | A company's source of financing: shares and/or debt. (See page(s) 1058) |
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| Common-size financial statement | A statement in which each amount is expressed as a percent of a base amount. In the balance sheet, the amount of total assets is usually selected as the base amount and is expressed as 100%. In the income statement, revenue is usually selected as the base amount. (See page(s) 1045) |
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| Comparative financial statement | A financial statement with data for two or more successive accounting periods placed in side-by-side columns, often with changes shown in dollar amounts and percentages. (See page(s) 1040) |
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| Efficiency | A company's productivity in using its assets; usually measured relative to how much revenue is generated for a certain level of assets. (See page(s) 1052) |
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| Equity ratio | The portion of total assets provided by equity, calculated as equity divided by total assets. (See page(s) 1059) |
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| Financial reporting | The process of communicating information that is relevant to investors, creditors, and others in making investment, credit, and other decisions. (See page(s) 1039) |
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| Financial statement analysis | The application of analytical tools to general purpose financial statements and related data for making business decisions. (See page(s) 1038) |
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| General purpose financial statements | Statements published periodically for use by a wide variety of interested parties; include the income statement, balance sheet, statement of retained earnings, cash flow statement, and notes related to the statements. (See page(s) 1039) |
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| Gross margin | See gross profit. (See page(s) 1061) |
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| Gross profit | The relation between sales and cost of goods sold. (See page(s) 1061) |
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| Horizontal analysis | A tool to evaluate changes in financial statement data across time. (See page(s) 1040) |
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| Liquidity | The availability of resources to meet short-term cash requirements. (See page(s) 1052) |
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| Profitability | A company's ability to generate an adequate return on invested capital. (See page(s) 1060) |
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| Ratio analysis | Determination of key relations among financial statement items. (See page(s) 1052) |
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| Solvency | A company's long-run financial viability and its ability to cover long-term obligations. (See page(s) 1058) |
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| Vertical analysis | The analysis of each financial statement item or group of items in terms of a specific base amount; the base amount is commonly defined as 100% and is usually revenue on the income statement and total assets on the balance sheet. Also called common-size analysis. (See page(s) 1045) |
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| Working capital | Current assets minus current liabilities. Also known as net working capital. (See page(s) 1052) |