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chapter 11 + 12
accounting
| Term | Definition |
|---|---|
| accrual | the recognition of revenue or expenses that have gradually increased over time but have not yet been recorded |
| deferral | a delay in recognizing revenue for cash already received or a delay in recognizing an expense for a bill already paid |
| horizontal analysis | the comparison of the same items on a company's financial statements for two or more periods |
| vertical analysis | The percentages for the current year are compared with the percentages of previous years or with the percentages of other companies in the same industry |
| liquidity ratio | a measure of the ability of a business to pay its current debts and provide cash for unexpected needs |
| current ratio | current assets divided by current liabilities. indicates whether a company can pay its bills and repay its loans |
| accounts receivable turnover rate | number of times per year that the business collects the average balance of accounts receivable |
| profitability ratio | used to evaluate the earnings performance of the business during the accounting period |
| ratio of stockholder's equity to liabilities | this ratio is total stockholders' equity divided by total liabilities |
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