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& Horicontal analysis is also called A) linear analysis. B) vertical analysis. Q) trend analysis. D) common size analysis 9. Vertical analysis is also known as A) B) Q) D) perpendicular analysis. common size analysis. trend analysis. sraight-line analysis. 10. A liquidity ratio measures the A) income or operating success of an enterprise over a period of time. B) ability of the enterprise to survive over a long period of time. C short-term ability of the enterprise to pay its maturing obligations and to meet uncxpected needs for cash. D) number of times interest is earned 11. The acid-test (quick) ratio is used to quickly determine a company's solvency and long-term debt paying ability A) B) relates cash, short-term investments, and net receivables to current liabilities. C) is calculated by taking one item from the income statement and one item from the talance sheet. is the same as the current ratio except it is rounded to the nearest whole percent. D) 12. Profit margin is calculated by dividing A) sales by cost of goods sold. B) gross profit by net sales. C) net income by stockholders' equity D) net income by net sales. 13. Asset turnover measures A) how often a company replaces its assets B) how efficiently a company uses its assets to generate sales. C) the portion of the assets that have been financed by creditors. D) the overall rate of return on assets. Page 3

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