Question 1

A liquidity ratio measures the

Accepted Answer

A) income or operating success of an enterprise over a period of time. 
B) ability of the enterprise to survive over a long period of time. 
C) short-term ability of the enterprise to pay its obligations and to meet unexpected needs for cash. 
D) number of times interest is earned. 
A) income or operating success of an enterprise over a period of time. 
B) ability of the enterprise to survive over a long period of time. 
C) short-term ability of the enterprise to pay its obligations and to meet unexpected needs for cash. 
D) number of times interest is earned.

Question 2

Small sample sizes for an industrial report rarely cause a comparability problem in using standards.

Accepted Answer

A) True 
 B)False

Question 3

Figure 16-1. Starbuck Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000 in 2011.The weighted average number of shares outstanding in 2011 was 50,000 shares.Starbuck Corporation's common stock is selling for $40 per share on the New York Stock Exchange.
Refer to Figure 16-1.Starbuck's price-earnings ratio is

Accepted Answer

A) 2. 
B) 5. 
C) 10. 
D) 8. 
A) 2. 
B) 5. 
C) 10. 
D) 8.

Question 4

Figure 16-3.
The current asset section of the balance sheets of the Shamrock Company as of June 30,2012 and 2011 is presented below.
   Refer to Figure 16-3.In the spaces provided below,complete a horizontal analysis of the current asset section of Shamrock Company's balance sheet for 2011.Your answers for "% Change" should be rounded to one decimal place,e.g.,10.3%.Provide a short evaluation of this analysis.

Accepted Answer

@#IMG-DLM& Shamrock Company experienced a large ga

Question 5

Common-size analysis expresses each item in a financial statement as a percent of a base amount.

Accepted Answer

A) True 
 B)False

Question 6

Industrial figures,standards and statistics should be used with so much care that they are not a very good reference point to compare companies.

Accepted Answer

A) True 
 B)False

Question 7

The type of analysis that is concerned with the relationships among the components of the financial statements is to prepare a

Accepted Answer

A) vertical analysis. 
B) trend analysis. 
C) profitability analysis. 
D) ratio analysis. 
A) vertical analysis. 
B) trend analysis. 
C) profitability analysis. 
D) ratio analysis.

Question 8

Arnold Company had $650,000 in sales on account last year.The beginning accounts receivable balance was $24,000 and the ending accounts receivable balance was $36,000.The company's accounts receivable turnover ratio was closest to

Accepted Answer

A) 21.67. 
B) 10.83. 
C) 27.08. 
D) 18.06. 
A) 21.67. 
B) 10.83. 
C) 27.08. 
D) 18.06.

Question 9

The inventory turnover is calculated by dividing

Accepted Answer

A) cost of goods sold by the ending inventory. 
B) cost of goods sold by the beginning inventory. 
C) cost of goods sold by the average inventory. 
D) average inventory by cost of goods sold. 
A) cost of goods sold by the ending inventory. 
B) cost of goods sold by the beginning inventory. 
C) cost of goods sold by the average inventory. 
D) average inventory by cost of goods sold.

Question 10

Which one of the following is not a characteristic generally evaluated in ratio analysis?

Accepted Answer

A) liquidity 
B) profitability 
C) leverage 
D) marketability 
A) liquidity 
B) profitability 
C) leverage 
D) marketability

Question 11

Which of the following is considered a profitability ratio?

Accepted Answer

A) Earnings per share 
B) Debt ratio 
C) Quick ratio 
D) Inventory turnover ratio 
A) Earnings per share 
B) Debt ratio 
C) Quick ratio 
D) Inventory turnover ratio

Question 12

Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time

Accepted Answer

A) that has been arranged from the highest amount to the lowest amount. 
B) that has been arranged from lowest amount to the highest amount. 
C) to determine which items are in error. 
D) to determine the amount and/or percentage increase or decrease that has taken place. 
A) that has been arranged from the highest amount to the lowest amount. 
B) that has been arranged from lowest amount to the highest amount. 
C) to determine which items are in error. 
D) to determine the amount and/or percentage increase or decrease that has taken place.

Question 13

Figure 16-5.
The following information that was obtained from the 2012 and 2011 financial statements of James Company,Norris Corporation,and Zorro Company:
   Refer to Figure 16-5.Compare the three companies and answer the following:

Accepted Answer

The answer of Figure 16-5.
The following information that was obtained...

Question 14

Common-size statements are statements of companies of similar size and operations.

Accepted Answer

A) True 
 B)False

Question 15

Industrial statistics should be taken as absolute norms as far as standards for comparability.

Accepted Answer

A) True 
 B)False

Question 16

Toller Drug Store had net credit sales of $6,000,000 and cost of goods sold of $2,000,000 for the year.The Accounts Receivable balances at the beginning and end of the year were $350,000 and $250,000,respectively.The accounts receivable turnover ratio was

Accepted Answer

A) 17.1 times. 
B) 10.0 times. 
C) 13.3 times. 
D) 20.0 times. 
A) 17.1 times. 
B) 10.0 times. 
C) 13.3 times. 
D) 20.0 times.

Question 17

The ________________ is a measure of the ability of a company to pay its short-term liabilities out of short-term assets.

Accepted Answer

The answer of The ________________ is a measure of the...

Question 18

An example of horizontal analysis is the increase in cost of goods sold by 25 percent from 2011 to 2012.

Accepted Answer

A) True 
 B)False

Question 19

A company measures how efficiently it is using its assets by calculating the _______________.

Accepted Answer

The answer of A company measures how efficiently it is...

Question 20

If equal amounts are added to the numerator and the denominator of a current ratio equal to one,the ratio will

Accepted Answer

A) increase. 
B) decrease. 
C) remain the same. 
D) equal zero. 
A) increase. 
B) decrease. 
C) remain the same. 
D) equal zero.

A liquidity ratio measures the

Small sample sizes for an industrial report rarely cause a comparability problem in using standards.

Common-size analysis expresses each item in a financial statement as a percent of a base amount.

Industrial figures,standards and statistics should be used with so much care that they are not a very good reference point to compare companies.

The type of analysis that is concerned with the relationships among the components of the financial statements is to prepare a

Arnold Company had $650,000 in sales on account last year.The beginning accounts receivable balance was $24,000 and the ending accounts receivable balance was $36,000.The company's accounts receivable turnover ratio was closest to

The inventory turnover is calculated by dividing

Which one of the following is not a characteristic generally evaluated in ratio analysis?

Which of the following is considered a profitability ratio?

Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time

Figure 16-5. The following information that was obtained from the 2012 and 2011 financial statements of James Company,Norris Corporation,and Zorro Company: Refer to Figure 16-5.Compare the three companies and answer the following:

Common-size statements are statements of companies of similar size and operations.

Industrial statistics should be taken as absolute norms as far as standards for comparability.

Toller Drug Store had net credit sales of $6,000,000 and cost of goods sold of $2,000,000 for the year.The Accounts Receivable balances at the beginning and end of the year were $350,000 and $250,000,respectively.The accounts receivable turnover ratio was

The ________________ is a measure of the ability of a company to pay its short-term liabilities out of short-term assets.

An example of horizontal analysis is the increase in cost of goods sold by 25 percent from 2011 to 2012.

A company measures how efficiently it is using its assets by calculating the _______________.

If equal amounts are added to the numerator and the denominator of a current ratio equal to one,the ratio will

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Filters

Exam 16: Financial Statement Analysis

A liquidity ratio measures the

Small sample sizes for an industrial report rarely cause a comparability problem in using standards.

Common-size analysis expresses each item in a financial statement as a percent of a base amount.

Industrial figures,standards and statistics should be used with so much care that they are not a very good reference point to compare companies.

The type of analysis that is concerned with the relationships among the components of the financial statements is to prepare a

Arnold Company had $650,000 in sales on account last year.The beginning accounts receivable balance was $24,000 and the ending accounts receivable balance was $36,000.The company's accounts receivable turnover ratio was closest to

The inventory turnover is calculated by dividing

Which one of the following is not a characteristic generally evaluated in ratio analysis?

Which of the following is considered a profitability ratio?

Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time

Figure 16-5. The following information that was obtained from the 2012 and 2011 financial statements of James Company,Norris Corporation,and Zorro Company: Refer to Figure 16-5.Compare the three companies and answer the following:

Common-size statements are statements of companies of similar size and operations.

Industrial statistics should be taken as absolute norms as far as standards for comparability.

Toller Drug Store had net credit sales of $6,000,000 and cost of goods sold of $2,000,000 for the year.The Accounts Receivable balances at the beginning and end of the year were $350,000 and $250,000,respectively.The accounts receivable turnover ratio was

The ________________ is a measure of the ability of a company to pay its short-term liabilities out of short-term assets.

An example of horizontal analysis is the increase in cost of goods sold by 25 percent from 2011 to 2012.

A company measures how efficiently it is using its assets by calculating the _______________.

If equal amounts are added to the numerator and the denominator of a current ratio equal to one,the ratio will

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Filters