Question 1

Three of the most common tools of financial analysis are:

Accepted Answer

A) Financial reporting,ratio analysis,vertical analysis. 
B) Ratio analysis,horizontal analysis,financial reporting. 
C) Horizontal analysis,vertical analysis,ratio analysis. 
D) Trend analysis,financial reporting,ratio analysis. 
E) Vertical analysis,political analysis,horizontal analysis. 
A) Financial reporting,ratio analysis,vertical analysis. 
B) Ratio analysis,horizontal analysis,financial reporting. 
C) Horizontal analysis,vertical analysis,ratio analysis. 
D) Trend analysis,financial reporting,ratio analysis. 
E) Vertical analysis,political analysis,horizontal analysis.

Question 2

Financial reporting includes not only general purpose financial statements,but also information from SEC filings,press releases,shareholders' meetings,forecasts,management letters,auditor's reports,and Webcasts.

Accepted Answer

A) True 
 B)False

Question 3

A good financial statement analysis report usually includes the following six sections: (1)________________________, (2)______________________, (3)_________________, (4)__________________, (5)____________________,and (6)______________________.

Accepted Answer

executive summary ;analysis ov

Question 4

Intra-company standards for financial statement analysis:

Accepted Answer

A) Are based on a company's prior performance and relations between its financial items. 
B) Are often set by competitors. 
C) Are set by the company's industry through published statistics. 
D) Are based on rules of thumb. 
E) Are published in Dun and Bradstreet. 
A) Are based on a company's prior performance and relations between its financial items. 
B) Are often set by competitors. 
C) Are set by the company's industry through published statistics. 
D) Are based on rules of thumb. 
E) Are published in Dun and Bradstreet.

Question 5

Refer to the following selected financial information from McCormik,LLC.Compute the company's working capital for Year 2.

Accepted Answer

A) $232,700. 
B) $220,600. 
C) $147,200. 
D) $111,700. 
E) $142,700. 
A) $232,700. 
B) $220,600. 
C) $147,200. 
D) $111,700. 
E) $142,700.

Question 6

Refer to the following selected financial information from Graceworks,Corp.Compute the company's days' sales in inventory for Year 2.

Accepted Answer

A) 203.4. 
B) 228.4. 
C) 179.5. 
D) 215.1. 
E) 113.3. 
A) 203.4. 
B) 228.4. 
C) 179.5. 
D) 215.1. 
E) 113.3.

Question 7

Trend percentage is calculated by dividing _________________________ by ___________________________ and multiplying the result by 100.

Accepted Answer

analysis period amou

Question 8

Ratios must refer to economically important relationships,such as a sale price compared to its cost.

Accepted Answer

A) True 
 B)False

Question 9

Standards for comparisons in financial statement analysis do not include:

Accepted Answer

A) Intra-company standards. 
B) Competitors' standards. 
C) Industry standards. 
D) Management standards. 
E) Guidelines (rules of thumb). 
A) Intra-company standards. 
B) Competitors' standards. 
C) Industry standards. 
D) Management standards. 
E) Guidelines (rules of thumb).

Question 10

One of several ratios that reflects solvency includes the:

Accepted Answer

A) Acid-test ratio. 
B) Current ratio. 
C) Times interest earned ratio. 
D) Total asset turnover. 
E) Days' sales in inventory. 
A) Acid-test ratio. 
B) Current ratio. 
C) Times interest earned ratio. 
D) Total asset turnover. 
E) Days' sales in inventory.

Question 11

The background on a company,its industry,and its economic setting is usually included in which of the following sections of a financial statement analysis report?

Accepted Answer

A) Executive summary. 
B) Analysis overview. 
C) Evidential conclusions. 
D) Factor analysis. 
E) Inferences. 
A) Executive summary. 
B) Analysis overview. 
C) Evidential conclusions. 
D) Factor analysis. 
E) Inferences.

Question 12

A company with a high inventory turnover requires a smaller investment in inventory than one producing the same sales with a lower turnover.

Accepted Answer

A) True 
 B)False

Question 13

Financial statement analysis may be used for personal financial investment decisions.

Accepted Answer

A) True 
 B)False

Question 14

Horizontal analysis is the comparison of a company's financial condition and performance to a base amount.

Accepted Answer

A) True 
 B)False

Question 15

Desjardin Landscaping's income statement reports net income of $75,300,which includes deductions for interest expense of $11,500 and income taxes of $34,900.Its times interest earned is:

Accepted Answer

A) 10.6 times 
B) 7.5 times 
C) 4.0 times 
D) 6.5 times 
E) 0.15 times 
A) 10.6 times 
B) 7.5 times 
C) 4.0 times 
D) 6.5 times 
E) 0.15 times

Question 16

Ratios may be expressed as (1)________________, (2)__________________,or (3)__________________.

Accepted Answer

percentages ;rates ;

Question 17

A common focus of financial statement users in evaluating a company's performance and financial condition includes evaluating its (1)__________________, (2)______________,and (3)___________________.

Accepted Answer

past and current performance ;

Question 18

_________________ applies analytical tools to general-purpose financial statements and related data for making business decisions.

Accepted Answer

Financial

Question 19

Refer to the following selected financial information from Graceworks Corp.Compute the company's inventory turnover for Year 2.

Accepted Answer

A) 1.79. 
B) 1.71. 
C) 1.85. 
D) 0.93. 
E) 1.75. 
A) 1.79. 
B) 1.71. 
C) 1.85. 
D) 0.93. 
E) 1.75.

Question 20

The standards for comparisons when interpreting measures from financial statement analysis include (1)___________, (2)____________, (3)_____________,and (4)_______________.

Accepted Answer

intra-company ;compe

Exam 17: Analysis of Financial Statements

Three of the most common tools of financial analysis are:

Financial reporting includes not only general purpose financial statements,but also information from SEC filings,press releases,shareholders' meetings,forecasts,management letters,auditor's reports,and Webcasts.

A good financial statement analysis report usually includes the following six sections: (1)________________________, (2)______________________, (3)_________________, (4)__________________, (5)____________________,and (6)______________________.

Intra-company standards for financial statement analysis:

Refer to the following selected financial information from McCormik,LLC.Compute the company's working capital for Year 2.

Refer to the following selected financial information from Graceworks,Corp.Compute the company's days' sales in inventory for Year 2.

Trend percentage is calculated by dividing _________________________ by ___________________________ and multiplying the result by 100.

Ratios must refer to economically important relationships,such as a sale price compared to its cost.

Standards for comparisons in financial statement analysis do not include:

One of several ratios that reflects solvency includes the:

The background on a company,its industry,and its economic setting is usually included in which of the following sections of a financial statement analysis report?

A company with a high inventory turnover requires a smaller investment in inventory than one producing the same sales with a lower turnover.

Financial statement analysis may be used for personal financial investment decisions.

Horizontal analysis is the comparison of a company's financial condition and performance to a base amount.

Desjardin Landscaping's income statement reports net income of $75,300,which includes deductions for interest expense of $11,500 and income taxes of $34,900.Its times interest earned is:

Ratios may be expressed as (1)________________, (2)__________________,or (3)__________________.

A common focus of financial statement users in evaluating a company's performance and financial condition includes evaluating its (1)__________________, (2)______________,and (3)___________________.

_________________ applies analytical tools to general-purpose financial statements and related data for making business decisions.

Refer to the following selected financial information from Graceworks Corp.Compute the company's inventory turnover for Year 2.

The standards for comparisons when interpreting measures from financial statement analysis include (1)___________, (2)____________, (3)_____________,and (4)_______________.

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

A good financial statement analysis report usually includes the following six sections: (1)__________, (2), (3)_, (4), (5),and (6)____________.

Trend percentage is calculated by dividing _ by ___ and multiplying the result by 100.

Ratios may be expressed as (1), (2),or (3)____.

A common focus of financial statement users in evaluating a company's performance and financial condition includes evaluating its (1), (2),and (3)___.

The standards for comparisons when interpreting measures from financial statement analysis include (1)_____, (2), (3)_,and (4)_________.