Cash flows are essentially the same as net income because they are both measured using accrual accounting principles.

The direct method for the preparation of the operating activities section of the statement of cash flows:

Use the following selected information from Dealer, LLC to determine the 2017 and 2016 common size percentages for operating expenses using Net sales as the base.    2017 2016 Net sales $ 276,200   $ 231,400   Cost of goods sold   151,900     129,590   Operating expenses   55,240     53,240   Net earnings   27,820     19,820  

Intra-company analysis is based on comparisons with competitors.

The cash basis of accounting commonly increases the comparability of financial statements from period to period.

A corporation reported cash of $27,000 and total assets of $461,000 on its balance sheet. Its common-size percent for cash equals:

A credit is used to record an increase in all of the following accounts except:

Use the following information to calculate cash paid for salaries:           Salaries expense $ 175,000   Salaries payable, January 1   20,000   Salaries payable, December 31   12,000  

The building blocks of financial statement analysis include (1) liquidity, (2) salability, (3) solvency, and (4) profitability.

Selected current year company information follows:           Net income $ 15,953   Net sales   712,855   Total liabilities, beginning-year   83,932   Total liabilities, end-of-year   103,201   Total stockholders’ equity, beginning-year   198,935   Total stockholders’ equity, end-of-year   121,851   The return on total assets is: