Question 1

Selected current year company information follows:   The return on total assets is:

Accepted Answer

A) 2.24% 
B) 2.81% 
C) 3.64% 
D) 4.67% 
E) 6.28% 
A) 2.24% 
B) 2.81% 
C) 3.64% 
D) 4.67% 
E) 6.28%

Question 2

Three of the most common tools of financial analysis are (1)____________, (2)__________________,and (3)______________________.

Accepted Answer

horizontal analysis

Question 3

Trend analysis of financial statement items can include comparisons of relations between items on different financial statements.

Accepted Answer

A) True 
 B)False

Question 4

Refer to the following selected financial information from Shakley's Incorporated.Compute the company's return on total assets for Year 2.

Accepted Answer

A) 9.6%. 
B) 15.2%. 
C) 2.6%. 
D) 22.2%. 
E) 14.5%. 
A) 9.6%. 
B) 15.2%. 
C) 2.6%. 
D) 22.2%. 
E) 14.5%.

Question 5

A corporation reported cash of $14,000 and total assets of $178,300.Its common-size percent for cash equals 7.85%.
($14,000/$178,300)* 100 = 7.85%

Accepted Answer

A) True 
 B)False

Question 6

Express the following balance sheets for Safety Company in common-size percentages.

Accepted Answer

The answer of Express the following balance sheets for Safety...

Question 7

Rajan Company's most recent balance sheet reported total assets of $1.9 million,total liabilities of $0.8 million,and total equity of $1.1 million.Its Debt to equity ratio is:

Accepted Answer

A) 0.42 
B) 0.58 
C) 1.38 
D) 0.73 
E) 1.00 
A) 0.42 
B) 0.58 
C) 1.38 
D) 0.73 
E) 1.00

Question 8

Liquidity refers to the availability of resources to meet short-term cash requirements.

Accepted Answer

A) True 
 B)False

Question 9

Refer to the following selected financial information from McCormik,LLC.Compute the company's accounts receivable turnover for Year 2.

Accepted Answer

A) 8.62. 
B) 8.28. 
C) 8.94. 
D) 5.78. 
E) 7.90. 
A) 8.62. 
B) 8.28. 
C) 8.94. 
D) 5.78. 
E) 7.90.

Question 10

Vertical analysis is the comparison of a company's financial condition and performance across time.

Accepted Answer

A) True 
 B)False

Question 11

A trend percent,or index number,is calculated by dividing the analysis period amount by the base period amount and multiplying the result by 100.

Accepted Answer

A) True 
 B)False

Question 12

A financial statement analysis report helps to reduce uncertainty in business decisions through a rigorous and sound evaluation.

Accepted Answer

A) True 
 B)False

Question 13

Financial statement analysis lessens the need for expert judgment.

Accepted Answer

A) True 
 B)False

Question 14

The debt ratio,the equity ratio,pledged assets to secured liabilities,and times interest earned are all ___________________ ratios.

Accepted Answer

The answer of The debt ratio,the equity ratio,pledged assets to...

Question 15

Quick assets divided by current liabilities is the:

Accepted Answer

A) Acid-test ratio. 
B) Current ratio. 
C) Working capital ratio. 
D) Current liability turnover ratio. 
E) Quick asset turnover ratio. 
A) Acid-test ratio. 
B) Current ratio. 
C) Working capital ratio. 
D) Current liability turnover ratio. 
E) Quick asset turnover ratio.

Question 16

All of the following statements regarding a business segment are true except:

Accepted Answer

A) A business segment is a part of a company's operations that serves a particular product line. 
B) A segment has assets,liabilities,and financial results of operations that can be distinguished from those of other parts of the company. 
C) A company's gain or loss from selling or closing down a segment is reported separately. 
D) The income tax effects of a discontinued segment are combined with income tax from continuing operations. 
E) A segment's income for the period prior to the disposal and the gain or loss resulting from disposing of the segment's assets are reported separately. 
A) A business segment is a part of a company's operations that serves a particular product line. 
B) A segment has assets,liabilities,and financial results of operations that can be distinguished from those of other parts of the company. 
C) A company's gain or loss from selling or closing down a segment is reported separately. 
D) The income tax effects of a discontinued segment are combined with income tax from continuing operations. 
E) A segment's income for the period prior to the disposal and the gain or loss resulting from disposing of the segment's assets are reported separately.

Question 17

Refer to the following selected financial information from Marston Company.Compute the company's accounts receivable turnover for Year 2.

Accepted Answer

A) 8.36. 
B) 8.37. 
C) 4.78. 
D) 8.59. 
E) 8.54. 
A) 8.36. 
B) 8.37. 
C) 4.78. 
D) 8.59. 
E) 8.54.

Question 18

Calculate the percent increase or decrease for each of the following financial statement items:

Accepted Answer

The answer of Calculate the percent increase or decrease for...

Question 19

_______________ financial statements are reports where financial amounts are placed side-by-side in columns on a single statement for analytical purposes.

Accepted Answer

The answer of _______________ financial statements are reports where financial...

Question 20

Refer to the following selected financial information from Keller Company.Compute the company's debt to equity for Year 2.

Accepted Answer

A) 0.9. 
B) 1.1. 
C) 0.5. 
D) 1.9. 
E) 2.1. 
A) 0.9. 
B) 1.1. 
C) 0.5. 
D) 1.9. 
E) 2.1.

Exam 17: Analysis of Financial Statements

Selected current year company information follows: The return on total assets is:

Three of the most common tools of financial analysis are (1)____________, (2)__________________,and (3)______________________.

Trend analysis of financial statement items can include comparisons of relations between items on different financial statements.

Refer to the following selected financial information from Shakley's Incorporated.Compute the company's return on total assets for Year 2.

A corporation reported cash of $14,000 and total assets of $178,300.Its common-size percent for cash equals 7.85%. ($14,000/$178,300)* 100 = 7.85%

Express the following balance sheets for Safety Company in common-size percentages.

Rajan Company's most recent balance sheet reported total assets of $1.9 million,total liabilities of $0.8 million,and total equity of $1.1 million.Its Debt to equity ratio is:

Liquidity refers to the availability of resources to meet short-term cash requirements.

Refer to the following selected financial information from McCormik,LLC.Compute the company's accounts receivable turnover for Year 2.

Vertical analysis is the comparison of a company's financial condition and performance across time.

A trend percent,or index number,is calculated by dividing the analysis period amount by the base period amount and multiplying the result by 100.

A financial statement analysis report helps to reduce uncertainty in business decisions through a rigorous and sound evaluation.

Financial statement analysis lessens the need for expert judgment.

The debt ratio,the equity ratio,pledged assets to secured liabilities,and times interest earned are all ___________________ ratios.

Quick assets divided by current liabilities is the:

All of the following statements regarding a business segment are true except:

Refer to the following selected financial information from Marston Company.Compute the company's accounts receivable turnover for Year 2.

Calculate the percent increase or decrease for each of the following financial statement items:

_______________ financial statements are reports where financial amounts are placed side-by-side in columns on a single statement for analytical purposes.

Refer to the following selected financial information from Keller Company.Compute the company's debt to equity for Year 2.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

Filters

Three of the most common tools of financial analysis are (1), (2),and (3)____________.