Accountancy Notes


Trend percentages

The changes in financial statement items from a base year to following years are often expressed as trend percentages to show the extent and direction…



Component percentages

One technique in financial statement analysis is known as vertical analysis. Vertical analysis results in common-size financial statements. A common-size balance sheet is a balance…


Ratios

In order to assess how your business is doing, you’ll need more than single numbers extracted from the financial statements. Each number has to be…



Quick Ratio

The quick ratio, also known as the acid test, serves a function that is quite similar to that of the current ratio. The difference between…


Efficiency Ratios

As a business owner/manager, you’re concerned with making the best use of your assets and being a low-cost producer in your industry. You can determine…