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1. What is meant by the term operating cycle? 2. Define current assets. What basis is used for ordering individual items within the current assets
1. What is meant by the term operating cycle? 2. Define current assets. What basis is used for ordering individual items within the current assets section? 3. Distinguish between long-term investments and property, plant, and equipment 4. How do current liabilities differ from long-term liabilities? 5. Identify the two parts of stockholders' equity in a corporation and indicate the purpose of each. 6. Name ratios useful in assessing (a) liquidity, (b) solvency, and (c) profitability 7. What do these classes of ratios measure? (a) Liquidity ratios. (b) Profitability ratios. (c) Solvency ratios 8. Holding all other factors constant, indicate whether each of the following signals generally good or bad news about a company. Increase in earnings per share. Increase in the current ratio Increase in the debt to total assets ratio Decrease in free cash flow
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