Question 1

A company has an average inventory on hand of $90,000 and its average days in inventory is 36.5 days. What is the cost of goods sold?

Accepted Answer

A) $900,000 
B) $2,102,400 
C) $2,106,000 
D) $1,051,200 
A) $900,000 
B) $2,102,400 
C) $2,106,000 
D) $1,051,200

Question 2

A successful discount retail store such as Kmart would probably have

Accepted Answer

A) a low inventory turnover. 
B) a high inventory turnover. 
C) zero profit margin. 
D) low volume. 
A) a low inventory turnover. 
B) a high inventory turnover. 
C) zero profit margin. 
D) low volume.

Question 3

The debt to assets ratio measures

Accepted Answer

A) the company's profitability. 
B) whether interest can be paid on debt in the current year. 
C) the proportion of interest paid relative to dividends paid. 
D) the percentage of the total assets provided by creditors. 
A) the company's profitability. 
B) whether interest can be paid on debt in the current year. 
C) the proportion of interest paid relative to dividends paid. 
D) the percentage of the total assets provided by creditors.

Question 4

In horizontal or trend analysis, each item is expressed as a(n)

Accepted Answer

A) amount. 
B) percentage. 
C) rate. 
D) amount or a percentage. 
A) amount. 
B) percentage. 
C) rate. 
D) amount or a percentage.

Question 5

In horizontal analysis, if an item has a negative amount in the base year, and a positive amount in the following year, no percentage change for that item can be computed.

Accepted Answer

A) True 
 B)False

Question 6

If the average collection period is 73 days, what is the accounts receivable turnover?

Accepted Answer

A) 5 times 
B) 20 times 
C) 10 times 
D) 6 times 
A) 5 times 
B) 20 times 
C) 10 times 
D) 6 times

Question 7

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 maturing 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 maturing obligations and to meet unexpected needs for cash. 
D) number of times interest is earned.

Question 8

Profitability ratios are frequently used as a basis for evaluating management's operating effectiveness.

Accepted Answer

A) True 
 B)False

Question 9

The discontinued operations section of the income statement refers to

Accepted Answer

A) discontinuance of a product line. 
B) the income or loss on products that have been completed and sold. 
C) obsolete equipment and discontinued inventory items. 
D) the disposal of a significant component of a business. 
A) discontinuance of a product line. 
B) the income or loss on products that have been completed and sold. 
C) obsolete equipment and discontinued inventory items. 
D) the disposal of a significant component of a business.

Question 10

Horizontal analysis is a technique for evaluating a financial statement item in the current year with other items in the current year.

Accepted Answer

A) True 
 B)False

Question 11

The following information pertains to Blue Flower Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.
What is the price-earnings ratio for this company?

Accepted Answer

A) 2.4 times 
B) 2.0 times 
C) 3.4 times 
D) 6.0 times 
A) 2.4 times 
B) 2.0 times 
C) 3.4 times 
D) 6.0 times

A company has an average inventory on hand of $90,000 and its average days in inventory is 36.5 days. What is the cost of goods sold?

A successful discount retail store such as Kmart would probably have

The debt to assets ratio measures

In horizontal or trend analysis, each item is expressed as a(n)

In horizontal analysis, if an item has a negative amount in the base year, and a positive amount in the following year, no percentage change for that item can be computed.

If the average collection period is 73 days, what is the accounts receivable turnover?

A liquidity ratio measures the

Profitability ratios are frequently used as a basis for evaluating management's operating effectiveness.

The discontinued operations section of the income statement refers to

Horizontal analysis is a technique for evaluating a financial statement item in the current year with other items in the current year.

The following information pertains to Blue Flower Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the price-earnings ratio for this company?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters

Exam 12: Financial Analysis: The Big Picture

A company has an average inventory on hand of $90,000 and its average days in inventory is 36.5 days. What is the cost of goods sold?

A successful discount retail store such as Kmart would probably have

The debt to assets ratio measures

In horizontal or trend analysis, each item is expressed as a(n)

In horizontal analysis, if an item has a negative amount in the base year, and a positive amount in the following year, no percentage change for that item can be computed.

If the average collection period is 73 days, what is the accounts receivable turnover?

A liquidity ratio measures the

Profitability ratios are frequently used as a basis for evaluating management's operating effectiveness.

The discontinued operations section of the income statement refers to

Horizontal analysis is a technique for evaluating a financial statement item in the current year with other items in the current year.

The following information pertains to Blue Flower Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the price-earnings ratio for this company?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters