Definition 3: Do financial statements help in Financial decisions and corporate valuation

Profitability: is the earning power ability of Compass Group PLC, Toronto Dominion Bank, Harris Corp, Morgan Stanley, and Boeing Co to generate profits and increase net assets in the future. The companies’ Net income, especially the persistent components of net income was considered as an indication of earning powers.

Solvency: refers to the ability of Compass Group PLC, Toronto Dominion Bank, Harris Corp, Morgan Stanley, and Boeing Co to meet debts as they come due.

Solvency ratios: refers to the financial ratios designed to measure Compass Group PLC, Toronto Dominion Bank, Harris Corp, Morgan Stanley, and Boeing Co ability to meet debts as they come due. (The current and quick ratios are the two solvency ratios.)