FouExam ndations of Accounting for Peregrine Global Services
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Course
Accounting for Peregrin
Institution
Accounting For Peregrin
FouExam ndations of Accounting for Peregrine Global Services
1. Financial statements provide information that is useful for making in-
vestments and other economic decisions about
business
2. Horizontal analysis Analysis of percentage increases and decreas-
es in financial statements across ti...
FouExam ndations of Accounting for Peregrine Global Services
1. Financial statements provide information that is useful for making in-
vestments and other economic decisions about
business
2. Horizontal analysis Analysis of percentage increases and decreas-
es in financial statements across time.
The amount of each line item on the most recent
statement is compared with the related item on
earlier statements, and expressed as a percent-
age change
3. Vertical analysis An percentage analysis that is used to show
the relationship of each component to the total
within a single statement.
The balance sheet is analyzed by stating each
asset item as a percent of total assets. Each
liability and stockholders equity item is stated
as a percent of total liabilities and stockholders
equity.
4. Common side statements Horizontal and vertical analyses are useful in
assessing trends, in relationships and financial
conditions, and operations of a business
5. Common size income can compare to businesses or more
statements
6. Solvency and profitability The ability of a business to repay its debts and
earn income
7. Solvency analysis Focuses on the ability of a business to pay,
or otherwise satisfy its current and noncurrent
liabilities
8. Current position analysis, Using metrics to assess a business, is ability to
working capital pay its current liabilities
9. Current ratio current assets divided by current liabilities
10. Quick ratio quick assets/current liabilities
,FouExam ndations of Accounting for Peregrine Global Services
11. Accounts Receivable sales on account increase accounts receivable,
analysis whereas collections from customers decrease
accounts receivable. It is desirable to collect
receivables as promptly as possible. The cash
generated by prompt collections from customers
may be used to pay or avoid current liabilities
and be used in operations for purposes, such
as purchasing merchandise in large quantities
at lower prices.
12. Accounts Receivable net credit sales/average net accounts receivable
Turnover Ratio
13. number of days' sales in Average Accounts Receivable / Average Daily
receivables Sales
14. Inventory turnover ratio cost of goods sold/average inventory
15. Ratio fixed assets to ratio of fixed assets to long-term liabilities is
long-term liabilities a solvency measure that indicates the margin
of safety for node holders and bond holders. It
also indicates the ability of a business to borrow
additional funds on a long-term basis.
16. Ratio of liabilities to Claims against the total assets of a business
stockholders equity are divided into two groups, one claims of cred-
itors and two claims of owners. The relationship
between the total claims of the creditors and
owners is a solvency measure that indicates the
margin of safety for creditors.
17. Time Interest Earned The higher, the ratio, the lower, the risk that
interest payments will not be made, if earnings
decrease. Dividing the sum of the income before
taxes and interest expense.
18. Profitability and market Profitability analysis focuses, primarily on the re-
analysis lationship between operating results as reported
, FouExam ndations of Accounting for Peregrine Global Services
in the income, statement
and resources avail-
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