Trend Analysis and Benchmarking

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Trend Analysis and Benchmarking The objective of business valuation is to provide an accounting of a company's worth in the marketplace that is as accurate as possible. Business valuation is conducted for several reasons. Which of the following is a reason for a firm to conduct business valuation analysis? To estimate stock values To satisfy government regulators To forecast additional assets To determine net income Which of the following describes trend analysis? Examining an organization's profitability, solvency, viability, and liquidity The analytical process of looking at the strengths and weaknesses both inside and outside of the organization The ability of an organization to survive in the long run Method used to assess past performance, the pro forma examination of future performance, and the comparison of the performance of a company Benchmarking is a type of trend analysis that examines inside performance as well as outside organizations. Which of the following best describes financial benchmarking? Comparing the ratio of expenses to sales inside of one company Comparing the stock prices of similar businesses Comparing the projected sales with the actual sales for the last month Comparing the internal expenses between periods In preparing to conduct benchmarking analysis, one should identify the key attributes of your company. Which of the following is an example of a key attribute used in benchmarking? Size of liabilities Operating expenses Company size Makeup of the board of directors You are explaining the five goals of financial analysis to one of your new employees. Which of the following will you tell the employee is the most important of these goals? Profitability Stability Liquidity Solvency Financial analysis is conducted to provide management information regarding the financial health of a business. Which of the following represents one of the five goals of financial analysis? Accountability Economical
Trend Analysis and Benchmarking Stability Performance The chief executive officer of a company is concerned with the company's market position. She asks you whether there is a means to compare her company with others from the industry. Click on the analytical method that you will recommend to her. Trend analysis is a method used by a financial analyst to assess past financial performance of a business. Which of the following is an example of trend analysis? Auditing financial statements Review of past performance for similar economic cycles Predicting the sales revenue Forecasting of net income Benchmarking is a type of trend analysis that examines inside performance as well as outside organizations. Which of the following best describes financial benchmarking? Comparing the ratio of expenses to sales inside of one company Comparing the projected sales with the actual sales for the last month Comparing the internal expenses between periods Comparing the stock prices of similar businesses
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