Question 1

Trend analysis is a form of horizontal analysis that can reveal patterns in data across successive periods.

Accepted Answer

A) True 
 B)False

Question 2

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 3

The four building blocks of financial analysis are (1)________,(2)________,(3)________ and (4)________.

Accepted Answer

liquidity and efficiency; solv

Question 4

Refer to the following selected financial information from Shakley's Incorporated.Compute the company's profit margin for Year 2. $$\begin{array} { l r r } 
 & \text { Year 2 } & \text { Year } 1 \
\text { Net sales } & \$ 478,500 & \$ 426,250 \
\text { Cost of goods sold } & 276,300 & 250,120 \
\text { Irterest experse } & 9,700 & 10,700 \
\text { Net incomebefore tax }& 67,250 & 52,680 \
\text { Net income after tax }  & 46,050 & 39,900 \
\text { Total assets } & 317,100 & 288,000 \
\text { Total liabilities }& 181,40 0 & 167,300 \
\text { Total equity }  & 135,70 0 & 120,700
\end{array}$$

Accepted Answer

A) 14.1%. 
B) 11.7%. 
C) 9.6%. 
D) 16.7%. 
E) 33.9%. 
A) 14.1%. 
B) 11.7%. 
C) 9.6%. 
D) 16.7%. 
E) 33.9%.

Question 5

Zhang Company reported Cost of goods sold of $835,000,beginning Inventory of $37,200 and ending Inventory of $46,300.The Inventory turnover ratio is:

Accepted Answer

A) 0.5 times. 
B) 418 times. 
C) 20 times. 
D) 56 times. 
E) 19 times. 
A) 0.5 times. 
B) 418 times. 
C) 20 times. 
D) 56 times. 
E) 19 times.

Question 6

The base amount for a common-size balance sheet is usually total assets.

Accepted Answer

A) True 
 B)False

Question 7

The dollar change for a comparative financial statement item is calculated by:

Accepted Answer

A) Subtracting the analysis period amount from the base period amount. 
B) Subtracting the base period amount from the analysis period amount. 
C) Subtracting the analysis period amount from the base period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
D) Subtracting the base period amount from the analysis period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
E) Subtracting the base period amount from the analysis amount,then dividing the result by the base amount. 
A) Subtracting the analysis period amount from the base period amount. 
B) Subtracting the base period amount from the analysis period amount. 
C) Subtracting the analysis period amount from the base period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
D) Subtracting the base period amount from the analysis period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
E) Subtracting the base period amount from the analysis amount,then dividing the result by the base amount.

Question 8

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 by analyst services such as Standard & Poor's. 
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 by analyst services such as Standard & Poor's.

Question 9

Market prospects are the ability to generate positive market expectations.

Accepted Answer

A) True 
 B)False

Question 10

The building blocks of financial statement analysis do not include:

Accepted Answer

A) External analyst services. 
B) Solvency. 
C) Profitability. 
D) Market prospects. 
E) Liquidity and efficiency. 
A) External analyst services. 
B) Solvency. 
C) Profitability. 
D) Market prospects. 
E) Liquidity and efficiency.

Question 11

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

Accepted Answer

analysis period amou

Question 12

Standards for comparison are not generally necessary when making judgments about a company's performance.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

If a company is comparing this year's financial performance to last year's financial performance,it is using horizontal analysis.

Accepted Answer

A) True 
 B)False

Question 15

The comparative income statements for Silverlight Company are shown below.Calculate the following ratios for Year 2:
(a)profit margin
(b)gross margin
(c)times interest earned.

Accepted Answer

The answer of The comparative income statements for Silverlight Company...

Question 16

Refer to the following selected financial information from Shakley's Incorporated.Compute the company's return on total assets for Year 2. $$\begin{array} { l r r } 
 & \text { Year 2 } & \text { Year } 1 \
\text { Net sales } & \$ 478,500 & \$ 426,250 \
\text { Cost of goods sold } & 276,300 & 250,120 \
\text { Irterest experse } & 9,700 & 10,700 \
\text { Net incomebefore tax }& 67,250 & 52,680 \
\text { Net income after tax }  & 46,050 & 39,900 \
\text { Total assets } & 317,100 & 288,000 \
\text { Total liabilities }& 181,40 0 & 167,300 \
\text { Total equity }  & 135,70 0 & 120,700
\end{array}$$

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 17

The return on common stockholder's equity measures a company's success in earning net income for its owners.

Accepted Answer

A) True 
 B)False

Question 18

Identify and describe three common tools of financial statement analysis.

Accepted Answer

Three common tools of financial statemen

Question 19

The purpose of financial statement analysis for internal users is to provide information to improve efficiency and effectiveness.

Accepted Answer

A) True 
 B)False

Question 20

In horizontal analysis the percent change is computed by:

Accepted Answer

A) Subtracting the analysis period amount from the base period amount. 
B) Subtracting the base period amount from the analysis period amount. 
C) Subtracting the analysis period amount from the base period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
D) Subtracting the base period amount from the analysis period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
E) Subtracting the base period amount from the analysis amount,then dividing the result by the analysis period amount. 
A) Subtracting the analysis period amount from the base period amount. 
B) Subtracting the base period amount from the analysis period amount. 
C) Subtracting the analysis period amount from the base period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
D) Subtracting the base period amount from the analysis period amount,dividing the result by the base period amount,then multiplying that amount by 100. 
E) Subtracting the base period amount from the analysis amount,then dividing the result by the analysis period amount.

Trend analysis is a form of horizontal analysis that can reveal patterns in data across successive periods.

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

The four building blocks of financial analysis are (1),(2),(3) and (4).

Zhang Company reported Cost of goods sold of $835,000,beginning Inventory of $37,200 and ending Inventory of $46,300.The Inventory turnover ratio is:

The base amount for a common-size balance sheet is usually total assets.

The dollar change for a comparative financial statement item is calculated by:

Intra-company standards for financial statement analysis:

Market prospects are the ability to generate positive market expectations.

The building blocks of financial statement analysis do not include:

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

Standards for comparison are not generally necessary when making judgments about a company's performance.

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

If a company is comparing this year's financial performance to last year's financial performance,it is using horizontal analysis.

The comparative income statements for Silverlight Company are shown below.Calculate the following ratios for Year 2: (a)profit margin (b)gross margin (c)times interest earned.

The return on common stockholder's equity measures a company's success in earning net income for its owners.

Identify and describe three common tools of financial statement analysis.

The purpose of financial statement analysis for internal users is to provide information to improve efficiency and effectiveness.

In horizontal analysis the percent change is computed by:

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

Trend analysis is a form of horizontal analysis that can reveal patterns in data across successive periods.

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

The four building blocks of financial analysis are (1)________,(2)________,(3)________ and (4)________.

Zhang Company reported Cost of goods sold of $835,000,beginning Inventory of $37,200 and ending Inventory of $46,300.The Inventory turnover ratio is:

The base amount for a common-size balance sheet is usually total assets.

The dollar change for a comparative financial statement item is calculated by:

Intra-company standards for financial statement analysis:

Market prospects are the ability to generate positive market expectations.

The building blocks of financial statement analysis do not include:

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

Standards for comparison are not generally necessary when making judgments about a company's performance.

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

If a company is comparing this year's financial performance to last year's financial performance,it is using horizontal analysis.

The comparative income statements for Silverlight Company are shown below.Calculate the following ratios for Year 2: (a)profit margin (b)gross margin (c)times interest earned.

The return on common stockholder's equity measures a company's success in earning net income for its owners.

Identify and describe three common tools of financial statement analysis.

The purpose of financial statement analysis for internal users is to provide information to improve efficiency and effectiveness.

In horizontal analysis the percent change is computed by:

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

The four building blocks of financial analysis are (1),(2),(3) and (4).

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