Match each of the following terms with the phrase that best describes it.

Quality of earnings Pro forma income Current ratio Discontinued operations Horizontal analysis Comprehensive income 1 A measure used to evaluate a company’s liquidity.

2 Usually excludes items that a company thinks are unusual or non-recurring.

3 Indicates the level of full and transparent information provided to users of the financial statements.

4 The disposal of a significant component of a business.

5 Determines increases or decreases in a series of financial statement data.

6 Includes all changes in stockholders’ equity during a period except those resulting from investments by stockholders and distributions to stockholders.

AppendixLO1