1. What is trend analysis? Explain how the percent change from one period to the next is calculated.

2. What is common-size analysis? How is common-size analysis information used?

3. Explain the difference between trend analysis and common-size analysis.

4. Name the ratios used to evaluate profitability. Explain what the statement “evaluate profitability” means.

5. Coca-Cola’s return on assets was 19.4 percent, and return on common shareholders’ equity was 41.7 percent. Briefly explain why these two percentages are different.

6. Coca-Cola had earnings per share of $5.12, and PepsiCo had earnings per share of $3.97. Is it accurate to conclude PepsiCo was more profitable? Explain your reasoning.

7. Name the ratios used to evaluate short-term liquidity. Explain what the statement “evaluate short-term liquidity” means.

8. Explain the difference between the current ratio and the quick ratio.

9. Coca-Cola had an inventory turnover ratio of 5.07 times (every 71.99 days), and PepsiCo had an inventory turnover ratio of 8.87 times (every 41.15 days). Which company had the best inventory turnover? Explain your reasoning.

10. Name the ratios used to evaluate long-term solvency. Explain what the term “longterm solvency” means.

11. Name the measures used to determine and evaluate the market value of a company. Briefly describe the meaning of each measure.

12. What is the balanced scorecard? Briefly describe the four perspectives of the balanced scorecard.