Accounting 102 Discussion Questions

Instruction 1. What is the difference between comparitive financial statements and common-size comparitive statements? 2. What is the advantage of using comparative statements for financial analysis rather than statements for a single date or period? 3. How would the Current and Quick Ratios of a service business compare? 4. How do you calculate the Price / Earnings Ratio? 5. What three factors would influence your evaluation as to whether a company's current ratio is good or bad?