WGU D076 Unit 4 Exam Questions & Answers 100% Correct!!

Trend Analysis - ANSWER-Comparing a firm's ratios across time. Cross Sectional Analysis - ANSWER-Comparing a firm's financial ratios to other firms' ratios or industry averages. Benchmarking - ANSWER-The process of completing a financial analysis to compare a firm's financial performance to that of other similar firms. Seasonal Firms - ANSWER-Firms whose performance varies according to the season. Liquidity Ratios - ANSWER-A category of ratios that measure a firm's ability to meet short-term obligations. Activity Ratios - ANSWER-A category of ratios that measure how well a company uses its assets to generate sales or cash, showing the firm's operational efficiency and profitability. Leverage Ratios - ANSWER-A category of ratios that consider how a firm is financed. Profitability Ratios - ANSWER-A category of ratios that are commonly used to directly judge how well management is doing as they strive to maximize owner wealth. Market Ratios - ANSWER-A category of ratios that are used to evaluate the current share price of a public firm's stock. Current Ratio - ANSWER-A liquidity ratio found by current assets divided by current liabilities.