Question 1

Which of the following debt management ratios is the most inclusive for measuring the degree to which a company relies on outsiders for financing?

Accepted Answer

A) debt-to-equity ratio 
B) times interest earned ratio 
C) long-term debt-to-equity ratio 
D) long-term debt-to-total assets ratio 
A) debt-to-equity ratio 
B) times interest earned ratio 
C) long-term debt-to-equity ratio 
D) long-term debt-to-total assets ratio

Question 2

Rhodes Bakery
The balance sheet taken from the company's 2020 10-K is provided below:  
-Refer to Rhodes Bakery. Calculate the following debt management ratios for 2020 and 2019: Times Interest Earned Ratio, Long-Term Debt-to-Equity Ratio, Debt-to-Equity Ratio, Long-Term Debt-to-Assets Ratio, and Debt-to-Assets Ratio. Income from operations were $65,000 and $49,000 and interest expense was $26,000 and $1,750 for 2020 and 2019, respectively. Round your answers to two decimal places. Comment on the company's debt management.

Accepted Answer

2020:
Times Interest Earned Ratio:
$65,0

Question 3

Rhodes Bakery
The balance sheet taken from the company's 2020 10-K is provided below:  
-Refer to Rhodes Bakery. Calculate the following profitability ratios for 2020 and 2019: Gross Profit Percentage, Operating Margin Percentage, Net Profit Margin Percentage, Return on Assets, and Return on Equity. Express each ratio as a percentage and round your answers to two decimal places, then comment on the company's performance in terms of profitability.
The company's income statements are available below. At December 31, 2018, total assets and total stockholders' equity were $325,000 and $287,500, respectively.

Accepted Answer

2020:
Gross Profit Percentage:
$235,000

Question 4

For each of the following sentences, select the phrase or group of words that best completes the statement.
-Measure of a company's success in earning a return for all providers of capital.

Accepted Answer

A) Debt-to-equity ratio 
B) Dividend payout ratio 
C) Dividend yield ratio 
D) Earnings per share 
E) Leverage
F)Return on assets ratio
G)Return on common equity ratio
H)Stock repurchase payout 
A) Debt-to-equity ratio 
B) Dividend payout ratio 
C) Dividend yield ratio 
D) Earnings per share 
E) Leverage
F)Return on assets ratio
G)Return on common equity ratio
H)Stock repurchase payout

Question 5

Use the selected financial information provided below to answer the following questions.   ?
A)Calculate the company's accounts receivable turnover ratio for 2021 and 2020.
B)Determine the number of days it would take to turn over accounts receivable at December 31, 2021 and 2020.
C)What could have caused the change?

Accepted Answer

A)Accounts receivable turnover ratio:
20

Question 6

For each of the following sentences, select the phrase or group of words that best completes the statement.
-Dividend yield ratio

Accepted Answer

A) Debt-to-equity ratio 
B) Dividend payout ratio 
C) Dividend yield ratio 
D) Earnings per share 
E) Leverage
F)Return on assets ratio
G)Return on common equity ratio
H)Stock repurchase payout 
A) Debt-to-equity ratio 
B) Dividend payout ratio 
C) Dividend yield ratio 
D) Earnings per share 
E) Leverage
F)Return on assets ratio
G)Return on common equity ratio
H)Stock repurchase payout

Question 7

Horizontal analysis is analysis in which

Accepted Answer

A) financial statement lines are expressed as a percent of the base (earliest) year. 
B) all items are presented as a percentage of one selected item on the financial statement. 
C) a statistic is calculated for the relationship between two items on a single financial statement or for two items on different financial statements. 
D) ratio increases and decreases are presented for the past two accounting periods. 
A) financial statement lines are expressed as a percent of the base (earliest) year. 
B) all items are presented as a percentage of one selected item on the financial statement. 
C) a statistic is calculated for the relationship between two items on a single financial statement or for two items on different financial statements. 
D) ratio increases and decreases are presented for the past two accounting periods.

Question 8

For each of the following sentences, select the phrase or group of words that best completes the statement.
-Inventory turnover ratio

Accepted Answer

A) Debt-to-equity ratio 
B) Dividend payout ratio 
C) Dividend yield ratio 
D) Earnings per share 
E) Leverage
F)Return on assets ratio
G)Return on common equity ratio
H)Stock repurchase payout 
A) Debt-to-equity ratio 
B) Dividend payout ratio 
C) Dividend yield ratio 
D) Earnings per share 
E) Leverage
F)Return on assets ratio
G)Return on common equity ratio
H)Stock repurchase payout

Question 9

Selected data from the financial statements are provided below:
  
-Refer to Rainsoft Company. Which of the following statements is true regarding the company's liquidity?

Accepted Answer

A) Based on the current ratio and operating cash flow ratio, the company appears to be in a worse position to pay its current obligations at the end of 2021 compared to 2020. 
B) The quick ratio decreased from 2020 to 2021. 
C) The operating cash flow ratio increased from 2020 to 2021. 
D) Based on the quick ratio and cash ratio, the company appears to be in a better position to pay its current obligations at the end of 2021 compared to 2020. 
A) Based on the current ratio and operating cash flow ratio, the company appears to be in a worse position to pay its current obligations at the end of 2021 compared to 2020. 
B) The quick ratio decreased from 2020 to 2021. 
C) The operating cash flow ratio increased from 2020 to 2021. 
D) Based on the quick ratio and cash ratio, the company appears to be in a better position to pay its current obligations at the end of 2021 compared to 2020.

Question 10

Use the following selected financial information to compare these two companies at December 31, 2019, and to answer the questions that follow.   ?
A)Compute the current ratios for the two companies.
B)Compute the quick ratios for the two companies.
C)Which company appears to be more liquid?
D)What other ratios would help to more fully assess the liquidity of these two companies?

Accepted Answer

A)Current Ratio:
Robin:
$15,500 current

Question 11

For each of the following sentences, select the phrase or group of words that best completes the statement.
-Total liabilities

Accepted Answer

A) Debt-to-equity ratio 
B) Dividend payout ratio 
C) Dividend yield ratio 
D) Earnings per share 
E) Leverage
F)Return on assets ratio
G)Return on common equity ratio
H)Stock repurchase payout 
A) Debt-to-equity ratio 
B) Dividend payout ratio 
C) Dividend yield ratio 
D) Earnings per share 
E) Leverage
F)Return on assets ratio
G)Return on common equity ratio
H)Stock repurchase payout

Question 12

For each of the following sentences, select the phrase or group of words that best completes the statement.
-Using debt to help the company earn a higher return.

Accepted Answer

A) Debt-to-equity ratio 
B) Dividend payout ratio 
C) Dividend yield ratio 
D) Earnings per share 
E) Leverage
F)Return on assets ratio
G)Return on common equity ratio
H)Stock repurchase payout 
A) Debt-to-equity ratio 
B) Dividend payout ratio 
C) Dividend yield ratio 
D) Earnings per share 
E) Leverage
F)Return on assets ratio
G)Return on common equity ratio
H)Stock repurchase payout

Question 13

You are a financial analyst for R&B Communications. One of your current assignments is to prepare an end-of-the year analysis of your employer's financial health. Today, you want to assess the company's working capital. You note that the end-of-year working capital is $15,000 greater than the working capital at the beginning of the year:   ?
Has your company's current position improved? Explain.

Accepted Answer

The amount of working capital and the ch

Question 14

The current assets of Rock Garden Gifts were considered very liquid at the end of the current year. This means that the company

Accepted Answer

A) has a larger quick ratio than current ratio. 
B) must decrease its liquidity in order to appear more favorable to potential investors. 
C) should attempt to borrow money in order to remain in business. 
D) is able to pay its current obligations using its current assets. 
A) has a larger quick ratio than current ratio. 
B) must decrease its liquidity in order to appear more favorable to potential investors. 
C) should attempt to borrow money in order to remain in business. 
D) is able to pay its current obligations using its current assets.

Question 15

Time series (or trend) analysis is analysis in which

Accepted Answer

A) dollar changes and percentage changes in a company's financial statement lines are compared over several years. 
B) all items are presented as a percentage of one selected item on a financial statement. 
C) a statistic is calculated for the relationship between two items on a single financial statement or for two items on different financial statements. 
D) ratio increases and decreases are presented for the past two accounting periods. 
A) dollar changes and percentage changes in a company's financial statement lines are compared over several years. 
B) all items are presented as a percentage of one selected item on a financial statement. 
C) a statistic is calculated for the relationship between two items on a single financial statement or for two items on different financial statements. 
D) ratio increases and decreases are presented for the past two accounting periods.

Question 16

Match the term with its correct definition.
-Forms that companies must file with the SEC to "register" their securities prior to offering them to investors.

Accepted Answer

A) Form 8-K 
B) Form 10-K 
C) Form 10-Q 
D) Forms S1 and S2 
E) MD&A 
A) Form 8-K 
B) Form 10-K 
C) Form 10-Q 
D) Forms S1 and S2 
E) MD&A

Question 17

The three aspects of return on equity (ROE) recognized by DuPont analysis are the net profit margin percentage, the ____________________ ratio, and leverage.

Accepted Answer

The answer of The three aspects of return on equity...

Question 18

Selected data from the financial statements are provided below:
  
-Refer to Rags to Riches. Which of the following would result from a horizontal analysis of the company's income statement?

Accepted Answer

A) Cost of goods sold is 42.1% of net sales for 2020. 
B) Gross profit is 57.9% of net sales for 2020. 
C) Cost of goods sold decreased 23.8% from 2019 to 2020. 
D) Inventory decreased $4,000 or 20% during 2019. 
A) Cost of goods sold is 42.1% of net sales for 2020. 
B) Gross profit is 57.9% of net sales for 2020. 
C) Cost of goods sold decreased 23.8% from 2019 to 2020. 
D) Inventory decreased $4,000 or 20% during 2019.

Question 19

For each of the following sentences, select the phrase or group of words that best completes the statement.
-A measure of the ability of a company to finance current obligations from cash from operations.

Accepted Answer

A) Debt-to-equity ratio 
B) Dividend payout ratio 
C) Dividend yield ratio 
D) Earnings per share 
E) Leverage
F)Return on assets ratio
G)Return on common equity ratio
H)Stock repurchase payout 
A) Debt-to-equity ratio 
B) Dividend payout ratio 
C) Dividend yield ratio 
D) Earnings per share 
E) Leverage
F)Return on assets ratio
G)Return on common equity ratio
H)Stock repurchase payout

Question 20

Liquidity analysis is required to

Accepted Answer

A) evaluate a company's profitability. 
B) assess a company's ability to pay its current liabilities. 
C) be reported in the financial statements for all publicly-traded companies. 
D) provide information about a company's capital structure. 
A) evaluate a company's profitability. 
B) assess a company's ability to pay its current liabilities. 
C) be reported in the financial statements for all publicly-traded companies. 
D) provide information about a company's capital structure.

Which of the following debt management ratios is the most inclusive for measuring the degree to which a company relies on outsiders for financing?

For each of the following sentences, select the phrase or group of words that best completes the statement. -Measure of a company's success in earning a return for all providers of capital.

For each of the following sentences, select the phrase or group of words that best completes the statement. -Dividend yield ratio

Horizontal analysis is analysis in which

For each of the following sentences, select the phrase or group of words that best completes the statement. -Inventory turnover ratio

Selected data from the financial statements are provided below: -Refer to Rainsoft Company. Which of the following statements is true regarding the company's liquidity?

For each of the following sentences, select the phrase or group of words that best completes the statement. -Total liabilities

For each of the following sentences, select the phrase or group of words that best completes the statement. -Using debt to help the company earn a higher return.

The current assets of Rock Garden Gifts were considered very liquid at the end of the current year. This means that the company

Time series (or trend) analysis is analysis in which

Match the term with its correct definition. -Forms that companies must file with the SEC to "register" their securities prior to offering them to investors.

The three aspects of return on equity (ROE) recognized by DuPont analysis are the net profit margin percentage, the ____________________ ratio, and leverage.

Selected data from the financial statements are provided below: -Refer to Rags to Riches. Which of the following would result from a horizontal analysis of the company's income statement?

For each of the following sentences, select the phrase or group of words that best completes the statement. -A measure of the ability of a company to finance current obligations from cash from operations.

Liquidity analysis is required to

Accounting and The Financial Statements

The Accounting Information System

Accrual Accounting

Internal Control And Cash

Sales And Receivables

Cost Of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long Term Liabilities

Stockholders Apos Equity

The Statement Of Cash Flows

Finance and Stock Market Equilibrium

Filters

Exam 12: Financial Statement Analysis

Which of the following debt management ratios is the most inclusive for measuring the degree to which a company relies on outsiders for financing?

For each of the following sentences, select the phrase or group of words that best completes the statement. -Measure of a company's success in earning a return for all providers of capital.

For each of the following sentences, select the phrase or group of words that best completes the statement. -Dividend yield ratio

Horizontal analysis is analysis in which

For each of the following sentences, select the phrase or group of words that best completes the statement. -Inventory turnover ratio

Selected data from the financial statements are provided below: -Refer to Rainsoft Company. Which of the following statements is true regarding the company's liquidity?

For each of the following sentences, select the phrase or group of words that best completes the statement. -Total liabilities

For each of the following sentences, select the phrase or group of words that best completes the statement. -Using debt to help the company earn a higher return.

The current assets of Rock Garden Gifts were considered very liquid at the end of the current year. This means that the company

Time series (or trend) analysis is analysis in which

Match the term with its correct definition. -Forms that companies must file with the SEC to "register" their securities prior to offering them to investors.

The three aspects of return on equity (ROE) recognized by DuPont analysis are the net profit margin percentage, the ____________________ ratio, and leverage.

Selected data from the financial statements are provided below: -Refer to Rags to Riches. Which of the following would result from a horizontal analysis of the company's income statement?

For each of the following sentences, select the phrase or group of words that best completes the statement. -A measure of the ability of a company to finance current obligations from cash from operations.

Liquidity analysis is required to

Accounting and The Financial Statements

The Accounting Information System

Accrual Accounting

Internal Control And Cash

Sales And Receivables

Cost Of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long Term Liabilities

Stockholders Apos Equity

The Statement Of Cash Flows

Finance and Stock Market Equilibrium

Filters