Please describe each of the following in your own words. PLEASE USE OWN WORDS, D
ID: 2381734 • Letter: P
Question
Please describe each of the following in your own words. PLEASE USE OWN WORDS, DO NOT COPT AND PASTE FROM ONLINE SOUCES
a)
Liquidity Measures
b)
Activity Measures
c)
Profitability Measures
d)
Financial Leverage Ratios
e)
Book Value Per Share of Common Stock
f)
Common Size Financial Statements
g)
Variable cost behavior
h)
Fixed cost behavior
i)
Mixed cost behavior
j)
Relevant range
k)
High-low method
l)
Cost formula
m)
Contribution Margin Ratio
n)
Break-Even Point Analysis
Please describe each of the following in your own words. PLEASE USE OWN WORDS, DO NOT COPT AND PASTE FROM ONLINE SOUCES
a)
Liquidity Measures
b)
Activity Measures
c)
Profitability Measures
d)
Financial Leverage Ratios
e)
Book Value Per Share of Common Stock
f)
Common Size Financial Statements
g)
Variable cost behavior
h)
Fixed cost behavior
i)
Mixed cost behavior
j)
Relevant range
k)
High-low method
l)
Cost formula
m)
Contribution Margin Ratio
n)
Break-Even Point Analysis
Explanation / Answer
1. A. Used to determine how easily a firm is able to convert their assets into cash to pay expenses and liabilities
2. B. Used to determine how easily a firm is able to convert different accounts into cash.
3. C. Used to determine how easily a firm is able to generate revenue
4. D.Used to determine how easily a firm is able to meet its financial obligations
5. E.The amount of money that a common share holder would get per share if a company was forced to liquidate, turn its assets into cash.
6. F.Uses percentages of a selected base figure in order to perform an analysis between companies
7. G.The cost to produce an item is directly proportional to the number of items being produced. If production doubles then so does the variable cost.
8. H. A cost that remains the same regardless of the amount of production.
9. I. A cost that will increase or decrease with production changes, however this change is not proportional to production.
10. J. A specific activity level that is used to predict which revenues and costs may occur within that activity level.
11. K.Method that is used to break up a mixed cost into its respective fixed and variable costs
12. L. Used for cost prediction to perform budgeting activities
13. M. The profit received from producing one unit divided by the sale price of the unit
14. N. Used to determine how many products a company would need to sell in order to pay off its fixed costs with a resulting net income of zero.