Of what use is the statement of cash flows?

Yellow Line, Blue words, Red Underlines, are key points ACCT 200 Review: 1. Alternative terminology: property, plant & equipment is sometimes called fixed assets or plant assets. 2. Ratio analysis: a) Liquidity ratios: measures the ability of the company to meet its short-term obligations i. Current ratio: current assets/current liabilities ii. Working capital: current assets-current liabilities iii. Earnings per share: (Net income-preferred stock dividends)/(average number of shares of common stock) If “average” is given, use it or if beginning shares & ending shares are given, add together and divide by 2. b) Solvency ratios: measures the ability of t