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The higher a company’s debt ratio, the lower the risk of a company not being able to meet its obligations.

General standards of comparisons, developed from experience, include the 2:1 level for the current ratio and 1:1 level for the acid-test ratio.

Financial reporting includes not only general purpose financial statements, but also information from SEC filings, press releases, shareholders’ meetings, forecasts, management letters, auditor’s reports, and Webcasts.

The percent change of a comparative financial statement item is computed by subtracting the analysis period amount from the base period amount, dividing the result by the base period amount and multiplying that result by 100.

The higher a company’s debt ratio, the lower the risk of a company not being able to meet its obligations.

Decreases in equity that represent costs of providing products or services to customers, used to earn revenues are called:

Dividends always decrease equity.

The ability to generate future revenues and meet long-term obligations is referred to as:

Dividends always decrease equity.

The rule that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of assets associated with revenue to be in a form other than cash, and (3) measures the amount of revenue as the cash plus the cash equivalent value of any noncash assets received from customers in exchange for goods or services, is called the: