What is vertical analysis

Assignment Help Accounting Basics

Reference no: EM1364664

1. What is vertical analysis? When would you use vertical analysis instead of horizontal? Do companies use one or the other? Please explain. What about industry averages? How do people use industry averages for comparative analysis?

2. What are the formulas of the following liquidity ratios and their formulas and what does each ratio tell us?

- Working capital
- Current ratio
- Current cash debt coverage ratio
- Inventor turnover ratio
- Days in inventory
- Receivables turnover ratio
- Receivables turnover ratio
- Average collection period

3. A great example of an extraordinary item in accounting is the BP oil explosion and subsequent oil spill. How would this be treated on BP's books? What about the organizations that were affected by the spill, do you think they would also have an extraordinary item to report? For example, what about resorts in the area? What about fishing companies in the area?

4. Changes in accounting principles are mostly reported retroactively by companies, which includes both the current and previous periods. How far back do you have to go? Do you have any reporting requirements for future periods?

Reference no: EM1364664

Questions Cloud

What is the average speed of a rider : What is the average speed of a rider on this Ferris wheel.

Budget preparation of health care organizations : How do imperfections in coding affect the budget preparation of health care organizations? How might it also affect. The contracts between professional billers and coders and health care organizations?

Advantage of deterministic local area network protocol : State the primary advantage of a deterministic local area network protocol over a nondeterministic local area network protocol.Give a real-life example of this advantage.

Description of income tax : Suppose that Helen's marginal income tax rate is 28 percent. Compare her after-tax income and her group medical costs under three scenarios:

What is vertical analysis : What is vertical analysis? When would you use vertical analysis instead of horizontal? Do companies use one or the other? Please explain. What about industry averages? How do people use industry averages for comparative analysis?

Local telephone calls and long distance telephone calls : Will the distinction between local telephone calls and long distance telephone calls ever disappear? What may cause this to happen?

Show internal factor evaluation matrix for mcdonalds : Prepare an IFE Matrix for McDonalds. Summarize your observations, including strategic implications as a result of the IFE and Financial Ratio analysis.

Ownership for an aggressive entrepreneurial firm : What is the most appropriate form of ownership for an aggressive entrepreneurial firm?

Explaining the challenges of hr professionals : Explore and explain the challenges HR professionals face within their own organizations to meet goals to become a strategic partner, an employee advocate for benefits, and a moral compass to instill corporate integrity in its leaders.

User Account

All Pages