Question 1

The gross margin ratio,return on total assets,and basic earnings per share are all ________ ratios.

Accepted Answer

The answer of The gross margin ratio,return on total assets,and...

Question 2

Ash Company reported sales of $400,000 for Year 1,$450,000 for Year 2,and $500,000 for Year 3.Using Year 1 as the base year,what is the revenue trend percent for Years 2 and 3?

Accepted Answer

A) 80% for Year 2 and 90% for Year 3. 
B) 88% for Year 2 and 80% for Year 3. 
C) 88% for Year 2 and 90% for Year 3. 
D) 112.5% for Year 2 and 125% for Year 3. 
E) 125% for Year 2 and 112.5% for Year 3. 
A) 80% for Year 2 and 90% for Year 3. 
B) 88% for Year 2 and 80% for Year 3. 
C) 88% for Year 2 and 90% for Year 3. 
D) 112.5% for Year 2 and 125% for Year 3. 
E) 125% for Year 2 and 112.5% for Year 3.

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

Market prospects are the ability to provide financial rewards sufficient to attract and retain financing.

Accepted Answer

A) True 
 B)False

Question 5

Jones Corp.reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet.The current ratio is:

Accepted Answer

A) 1.4:1. 
B) 0.7:1. 
C) 0.3:1. 
D) 1:1. 
E) 0.4:1. 
A) 1.4:1. 
B) 0.7:1. 
C) 0.3:1. 
D) 1:1. 
E) 0.4:1.

Question 6

General standards of comparisons,developed from experience,include the 2:1 level for the current ratio and 1:1 level for the acid-test ratio.

Accepted Answer

A) True 
 B)False

Question 7

Net income divided by average total assets is:

Accepted Answer

A) Profit margin. 
B) Total asset turnover. 
C) Return on total assets. 
D) Days' income in assets. 
E) Current ratio. 
A) Profit margin. 
B) Total asset turnover. 
C) Return on total assets. 
D) Days' income in assets. 
E) Current ratio.

Question 8

The building blocks of financial statement analysis include (1)liquidity,(2)solvency,(3)profitability,and (4)market prospects.

Accepted Answer

A) True 
 B)False

Question 9

Carducci Corporation reported net sales of $3.6 million and average total assets of $1.1 million.The total asset turnover is:

Accepted Answer

A) 0.31 times. 
B) 3.27 times. 
C) 4.30 times. 
D) 2.27 times. 
E) 0.77 times. 
A) 0.31 times. 
B) 3.27 times. 
C) 4.30 times. 
D) 2.27 times. 
E) 0.77 times.

Question 10

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 11

Refer to the following selected financial information from McCormik,LLC.Compute the company's accounts receivable turnover for Year 2. $$\begin{array} { l r r } 
&  { \text { Year 2 } } & \text { Year 1 } \
\text { Cash }  & \$37,500 & \$ 36,850 \
\text { Short-term irvestrnents }& 90,000 & 90,000 \
\text { Accounts receivable, net } & 85,500 & 86,250 \
\text { Merchardise irventory } & 121,00 0 & 117,000 \
\text { Prepaid experses } & 12,100 & 13,500 \
\text { Plart assets } & 388,000 & 392,000 \
\text { Accounts payable }  & 113,40 0 & 111,750 \
\text { Net sales } & 711,000 & 706,000 \
\text { Cost of goods sold }& 390,000 & 385,500
\end{array}$$

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 12

A corporation reports the following year-end balance sheet data.The company's equity ratio equals: $$\begin{array} { l r l r r } 
\text { Cash } & \$ 40,000 & \text { Current liabilities } & \$ 5,000 \
\text { Accourts receivable } & 55,000 & \text { Long-temn liabilities } & 35,000 \
\text { Irventory } & 60,000 & \text { Cormon stock } & 100,000 \
\text { Equiprment } & \underline{145,000} & \text { Retaired earnirgs } & \underline{90,000} \
\text { Total assets } & \underline{\$ 300,000} & \text { Total liabilities ard equity } & \underline{\$ 300,000}
\end{array}$$

Accepted Answer

A) 0.58 
B) 1.27 
C) 2.07 
D) 0.37 
E) 0.63 
A) 0.58 
B) 1.27 
C) 2.07 
D) 0.37 
E) 0.63

Question 13

All of the following are true of a financial statement analysis report,except:

Accepted Answer

A) Contains ambiguities and qualifications. 
B) Forces preparers to organize their reasoning and to verify the logic of analysis. 
C) Serves as a method of communication to users. 
D) Helps users and preparers to refine conclusions based on evidence from key building blocks. 
E) Enables readers to see the process and rationale of analysis. 
A) Contains ambiguities and qualifications. 
B) Forces preparers to organize their reasoning and to verify the logic of analysis. 
C) Serves as a method of communication to users. 
D) Helps users and preparers to refine conclusions based on evidence from key building blocks. 
E) Enables readers to see the process and rationale of analysis.

Question 14

The comparison of a company's financial condition and performance to a base amount is known as:

Accepted Answer

A) Financial reporting. 
B) Horizontal ratios. 
C) Investment analysis. 
D) Risk analysis. 
E) Vertical analysis. 
A) Financial reporting. 
B) Horizontal ratios. 
C) Investment analysis. 
D) Risk analysis. 
E) Vertical analysis.

Question 15

A corporation reported cash of $14,000 and total assets of $178,300 on its balance sheet.Its common-size percent for cash equals:

Accepted Answer

A) 0.0785%. 
B) 7.85%. 
C) 12.73%. 
D) 1273%. 
E) 7850%. 
A) 0.0785%. 
B) 7.85%. 
C) 12.73%. 
D) 1273%. 
E) 7850%.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

A company had a market price of $27.50 per share,earnings per share of $1.25,and dividends per share of $0.40.Its price-earnings ratio equals:

Accepted Answer

A) 3.1. 
B) 22.0. 
C) 93.8. 
D) 32.0. 
E) 3.3. 
A) 3.1. 
B) 22.0. 
C) 93.8. 
D) 32.0. 
E) 3.3.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

The comparison of a company's financial condition and performance to a base amount is known as ________.

Accepted Answer

The answer of The comparison of a company's financial condition...

The gross margin ratio,return on total assets,and basic earnings per share are all ________ ratios.

Ash Company reported sales of $400,000 for Year 1,$450,000 for Year 2,and $500,000 for Year 3.Using Year 1 as the base year,what is the revenue trend percent for Years 2 and 3?

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

Market prospects are the ability to provide financial rewards sufficient to attract and retain financing.

Jones Corp.reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet.The current ratio is:

General standards of comparisons,developed from experience,include the 2:1 level for the current ratio and 1:1 level for the acid-test ratio.

Net income divided by average total assets is:

The building blocks of financial statement analysis include (1)liquidity,(2)solvency,(3)profitability,and (4)market prospects.

Carducci Corporation reported net sales of $3.6 million and average total assets of $1.1 million.The total asset turnover is:

Standards for comparisons in financial statement analysis do not include:

All of the following are true of a financial statement analysis report,except:

The comparison of a company's financial condition and performance to a base amount is known as:

A corporation reported cash of $14,000 and total assets of $178,300 on its balance sheet.Its common-size percent for cash equals:

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

A company had a market price of $27.50 per share,earnings per share of $1.25,and dividends per share of $0.40.Its price-earnings ratio equals:

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

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

The comparison of a company's financial condition and performance to a base amount is known as ________.

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Applying Present and Future Values

Investments

International Operations

Filters

Exam 13: Analyzing and Interpreting Financial Statements

The gross margin ratio,return on total assets,and basic earnings per share are all ________ ratios.

Ash Company reported sales of $400,000 for Year 1,$450,000 for Year 2,and $500,000 for Year 3.Using Year 1 as the base year,what is the revenue trend percent for Years 2 and 3?

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

Market prospects are the ability to provide financial rewards sufficient to attract and retain financing.

Jones Corp.reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet.The current ratio is:

General standards of comparisons,developed from experience,include the 2:1 level for the current ratio and 1:1 level for the acid-test ratio.

Net income divided by average total assets is:

The building blocks of financial statement analysis include (1)liquidity,(2)solvency,(3)profitability,and (4)market prospects.

Carducci Corporation reported net sales of $3.6 million and average total assets of $1.1 million.The total asset turnover is:

Standards for comparisons in financial statement analysis do not include:

All of the following are true of a financial statement analysis report,except:

The comparison of a company's financial condition and performance to a base amount is known as:

A corporation reported cash of $14,000 and total assets of $178,300 on its balance sheet.Its common-size percent for cash equals:

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

A company had a market price of $27.50 per share,earnings per share of $1.25,and dividends per share of $0.40.Its price-earnings ratio equals:

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

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

The comparison of a company's financial condition and performance to a base amount is known as ________.

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Applying Present and Future Values

Investments

International Operations

Filters