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NACVA Accredited Valuation Analyst Exam Questions 151–155 (page: 32)

Family law courts generally recognize three basic approaches to value. Which of the following is NOT out of those approaches?

A common first step in ratio analysis of financial statements is to prepare what are sometimes called
___________ . On these statements, each line item is expressed as a percentage of the total. For example, on the balance sheet, each line is shown as a percentage of total assets.

Which of the following ratios demonstrate the company’s ability to meet its current obligations? These can help resolve one of the common controversies in business valuation: whether the company has any assets in excess of those required for its operating needs or, conversely, whether its assets fall short of its needs.

A single rule of thumb?? that, for example, a satisfactory ratio is 2.0:1?? is not widely followed in determining the current ratio, because of vastly different conditions typical in various industries, such as accounts receivable and collection periods and inventory turnover periods. As with most ratios, the adequacy of the current ratios for the given company can be better gauged by:

___________ is defined as the sum of cash and cash equivalents plus receivables (usually all current assets listed above inventory) divided by current liabilities. For most companies, the only other significant current asset is inventory??usually the slowest of the current assets is to be converted to cash.