12-4 Financial Decision-Making

Match the vocabulary word with the correct definition. current ratio current assets compared to the current liabilities debt to equity ratio the company's liabilities divided by the owner's equity return on equity ratio the net profit of the business compared to the amount of owner's equity net income ratio the total sales compared to the net income for a period financial performance ratios comparisons of a company's financial elements that indicate how well the business is doing discrepancies differences between actual and budgeted performance If a budget contains several discrepancies, the LAST adjustment that managers should attempt is to find ways to increase revenue adjust the budget seek ways to cut expenses double-check their calculations