| A | B |
|---|
| Working Capital | The amount by which current assets exceed current liabilities. |
| Available | Funds ready to be used. |
| Balance Sheet | A report of the balances in the permanent accounts on a specific date. |
| Convert | To turn into something else. |
| Current Assets | The assets that are either used up or converted to cash during the normal operating cycle of the business. |
| Current Liabilities | The debts of the business that must be paid within the next accounting period. |
| Current Ratio | The relationship between current assets and current liablilites; calculated by dividing current assets by current liabilities. |
| Evaluate | To determine value or worth after careful consideration. |
| Financial Statements | Reports prepared summarize the changes resulting from business transactions that occur during an accounting period. |
| Illustrate | To make clear or explain by example or comparison. |
| Income statement | A report of the net income or net loss for a specific period; sometimes called a profit-and-loss statement or earnings statement. |
| Liquidity Ratio | The measure of a business's ability to pay its current debts as they become due and to provide for unexpected needs of cash. |
| Profitability Ratio | A ratio used to evaluate the earning performance of a business during the accounting period. |
| Quick Ratio | A measure of the relationship between short-term assets and current liabilities; calculated by dividing the total cash and receivables by the current liabilities. |
| Ratio Analysis | The process of evaluating the relationship between various amounts in the financial statements. |
| Report Form | A balance sheet format that lists classifications one under another. |
| Return on Sales | A ratio that examines the porportion of each sales dollar that represents profit; calculated by dividing net income by sales. |
| Statement of Cash Flows | A financial statement summarizes the cash receipts and cash payments resulting from business activities during a period. |
| Statement of Changes in Owner's Equity | A financial statement that summarizes in the owner's capital account as a result of business transactions during the period. |
