Please describe each of the following in your own words. PLEASE USE OWN WORDS, D

Question

Please describe each of the following in your own words. PLEASE USE OWN WORDS, DO NOT COPT AND PASTE FROM ONLINE SOUCES

a)                

Liquidity Measures

b)                

Activity Measures

c)                

Profitability Measures

d)                

Financial Leverage Ratios

e)                

Book Value Per Share of Common Stock

f)                  

Common Size Financial Statements

g)                

Variable cost behavior

h)                

Fixed cost behavior

i)                  

Mixed cost behavior

j)                  

Relevant range

k)                

High-low method

l)                  

Cost formula

m)              

Contribution Margin Ratio

n)                

Break?Even Point Analysis

Please describe each of the following in your own words. PLEASE USE OWN WORDS, DO NOT COPT AND PASTE FROM ONLINE SOUCES

a)                

Liquidity Measures

b)                

Activity Measures

c)                

Profitability Measures

d)                

Financial Leverage Ratios

e)                

Book Value Per Share of Common Stock

f)                  

Common Size Financial Statements

g)                

Variable cost behavior

h)                

Fixed cost behavior

i)                  

Mixed cost behavior

j)                  

Relevant range

k)                

High-low method

l)                  

Cost formula

m)              

Contribution Margin Ratio

n)                

Break?Even Point Analysis

Explanation / Answer

A)

The Quick Ratio - aka the quick assets ratio or the Acid test Ratio - is a liquidity indicator that further refines the current ratio by measuring the amount of the most Liqied current assets there are to cover current liabilities. The quick ratio is more conservative than the current ratio because it excludes inventory and other current assets, which are more difficult to turn into cash. Therefore, a higher ratio means a more liquid current position.

Formula: Quick Ratio=Cash& Equivalents+short-Term Investments+Accounts Receivabli/Current Liabilities

B)

Financial leverage can be aptly described as the extent to which a business or investor is using the borrowed money. Business companies with high leverage are considered to be at risk of bankruptcy if, in case, they are not able to repay the debts, it might lead to difficulties in getting new lenders in future. It is not that financial leverage is always bad. However, it can lead to an increased shareholders

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