1. Financial ratios can be used to assess the, aspects of a firm's performance. 2. Factors to consider in communicating useful information are: 3. Three common methods of financial statement analysis are: 4. and analysis is the study of an individual financial statement item over: accounting period. 5. The formula for computing the percent change from Year 1 to Year 2 is the minus the balance divided by the 6. balance. analysis uses percentages to compare each of the parts of one fin statement to a key dollar amount in that financial statement. 7. analysis involves studying various relationships between different line in a set of financial statements. 8. One category of ratio analysis is Liquidity. Liquidity measures a company's ability to pa obligations. 9. Working capital is defined as 10. The current ratio is calculated by dividing. by. 11. Another category of ratio analysis is Solvency. Solvency measures a company's ability debt. 12. Another category of ratio analysis is Profitability. Profitability refers to a company's ab generate 13. Net margin describes the percentage of each goods sold and other expenses. It is computed by dividing dollar remaining after subtr by net sale 14. The most frequently quoted measure of earnings performance is earnings per share. I as follows: net earnings available for common stock divided by the average number of out common shares. To arrive at net earnings available for common stock you subtract any. dividends from net income that will be paid before common dividends. To calculate avera