HRTM 421 Ch 3 (Solved)

Readers of Financial Analysis correct answers -Owners -Lenders -Managers -Government -Suppliers -Investment Analysts -Mergers and Aquisitions Owners correct answers Track and evaluate management's performance Lenders correct answers Determine the risk of the business defaulting on its loan Managers correct answers Compare actual and budgeted results Government correct answers Ensure that taxes have been paid Suppliers correct answers Evaluate the company's ability to pay its obligations Investment Analysts correct answers Evaluate the company's performance Mergers and Acquisitions correct answers Highlight financial strengths, upside potential, and future value Types of Analysis correct answers -Vertical -Horizontal -Trend -Published Industry Averages -Ratio Vertical Analysis correct answers -Used to analyze variable expenses -Variable expenses should increase or decrease with the level of sales Vertical Analysis Accounts are Sized Using: correct answers -Total Revenue -Departmental Revenue Horizontal Analysis correct answers -Tracks and analyzes the income statement and balance sheet -Focuses on both $$ and% changes -Analyzes changes over time Trend Analysis correct answers -Calculations and data points -Over a specified period of time -Presented on line graphs and bar charts