Financial Analysis Review

What are two common ways to perform a ratio analysis?

• Solvency

• Trend

• Comparison

• Profitability

To compare the ratios over time for the same business

• Solvency

• Trend Analysis

• Comparison

  Analysis

• Profitability

To compare the ratios to other similar operations

• Solvency

• Trend Analysis

• Comparison

  Analysis

• Profitability

The ability of a business to generate enough cash to pay bills without disrupting business operations

• Solvency

• Current Ratio

• Working Capital

• Liquidity

Which of the following factors is not included in liquidity?

• Working capital

• Current ratio

• Debt structure

• Net capital ratio

Current assets divided by current liabilities. It measures the ability of the current assets, if sold, to cover the short-term liabilities

• Solvency

• Trend Analysis

• Comparison

  Analysis

• Current Ratio

_________ is defined as current assets minus current liabilities

This is an indication of the percent of total farm debt (liabilities) that is due in one year.

• Asset Structure

• Debt Structure

• Working Capital

• Current Reatio

A _____ (increase or decrease) in debt structure would indicate that new term debt was incurred during the year.

The ability of all assets, if sold at market value, to cover all debts

• Solvency

• Current Ratio

• Working Capital

• Liquidity