Question 1

-Refer to the data for Computech Industries.
Based on this information, what is Computech's number of days' sales in receivables assuming a 360 day year)?

Accepted Answer

A) 32.4 days 
B) 36.0 days 
C) 28.8 days 
D) 25.2 days 
A) 32.4 days 
B) 36.0 days 
C) 28.8 days 
D) 25.2 days

Question 2

An example of horizontal analysis is the increase in cost of goods sold by 29% from 2015 to 2016.

Accepted Answer

A) True 
 B)False

Question 3

Pinecrest Company
Use the selected data from Pinecrest Company's financial statements to answer the following question.  
-Refer to the data for Pinecrest Company.
The amount of working capital at the end of 2016 is

Accepted Answer

A) $ 36,000 
B) $ 44,000 
C) $ 99,000 
D) $174,000 
A) $ 36,000 
B) $ 44,000 
C) $ 99,000 
D) $174,000

Question 4

Which of the following statements is generally considered desirable?

Accepted Answer

A) A large decrease in accounts receivable turnover ratio 
B) A decrease in the number of days' sales in receivables 
C) An increase in sales along with a larger decrease in the gross profit ratio 
D) A decrease in the cash flow from operations to current liabilities ratio 
A) A large decrease in accounts receivable turnover ratio 
B) A decrease in the number of days' sales in receivables 
C) An increase in sales along with a larger decrease in the gross profit ratio 
D) A decrease in the cash flow from operations to current liabilities ratio

Question 5

Sunshine Farm Supply
Following are selected data from the financial statements of Sunshine Farm Supply:  
-Refer to the data for Sunshine Farm Supply.
Which of the following would result from a horizontal analysis of its balance sheet?

Accepted Answer

A) Accounts receivable increased $22,000 or 57.9% during 2016. 
B) Accounts receivable is five times larger than Merchandise inventory in 2016. 
C) Accounts receivable is 13.3% of total assets for 2016. 
D) Merchandise inventory is 2.7% of total assets for 2016. 
A) Accounts receivable increased $22,000 or 57.9% during 2016. 
B) Accounts receivable is five times larger than Merchandise inventory in 2016. 
C) Accounts receivable is 13.3% of total assets for 2016. 
D) Merchandise inventory is 2.7% of total assets for 2016.

Question 6

Because discontinued segments of a business will not be part of the company's future operations, discontinued operations are disclosed separately on the income statement.

Accepted Answer

A) True 
 B)False

Question 7

The return on sales ratio is a variation of the profit margin ratio.

Accepted Answer

A) True 
 B)False

Question 8

Spring Market has an inventory turnover ratio of 15 times.Fall Market has a turnover of 14 times.Fall is more effective in managing inventory.

Accepted Answer

A) True 
 B)False

Question 9

What is the best way to assess solvency? Explain.

Accepted Answer

Evaluating leverage best assesses solven

Question 10

The Starch Company experiences a 20% increase in sales over the previous year.However, gross profit actually decreased by 10% from the previous year.What are some of the possible causes for an increase in sales but a decline in gross profit?

Accepted Answer

Rising costs to either manufacture or pu

Question 11

Which of the following is a measure of the time that it takes to convert current assets into cash?

Accepted Answer

A) accounts receivable turnover ratio 
B) cash to cash operating cycle 
C) number of days' sales in inventory 
D) working capital 
A) accounts receivable turnover ratio 
B) cash to cash operating cycle 
C) number of days' sales in inventory 
D) working capital

Question 12

What is meant by a company's "long-term financial health"? Which side of the balance sheet is more informative for this issue? Explain.

Accepted Answer

Solvency is a company's long-term financ

Question 13

Pinecrest Company
Use the selected data from Pinecrest Company's financial statements to answer the following question.  
-Refer to the data for Pinecrest Company.
The current ratio for 2016 is

Accepted Answer

A) 0.60 to 1 
B) 0.99 to 1 
C) 1.34 to 1 
D) 1.68 to 1 
A) 0.60 to 1 
B) 0.99 to 1 
C) 1.34 to 1 
D) 1.68 to 1

Question 14

is a line item on the income statement to reflect any gain or loss from an event that is both unusual in nature and infrequent in occurrence.

Accepted Answer

The answer of is a line item on the income...

Question 15

Which of the following ratios is the best measure in analyzing a company's ability to pay interest on long-term debt and to repay the long-term debt over several years?

Accepted Answer

A) Debt-to-equity ratio 
B) Times interest earned ratio 
C) Debt service coverage ratio 
D) Acid-test ratio 
A) Debt-to-equity ratio 
B) Times interest earned ratio 
C) Debt service coverage ratio 
D) Acid-test ratio

Question 16

Ware Company has a return on assets of 15% and a return on common stockholders' equity of 10%.John Ware, the president of the company, has asked you to explain the reason for this difference.What causes the difference? How is the concept of financial leverage involved?

Accepted Answer

A return on stockholders' equity that is

Question 17

Trend analysis is analysis

Accepted Answer

A) of dollar changes and percentage changes over several years. 
B) in which all items are presented as a percentage of one selected item on a financial statement. 
C) in which a statistic is calculated for the relationship between two items on a single financial statement or for two items on different financial statements. 
D) of all ratios that increased or decreased over past accounting periods. 
A) of dollar changes and percentage changes over several years. 
B) in which all items are presented as a percentage of one selected item on a financial statement. 
C) in which a statistic is calculated for the relationship between two items on a single financial statement or for two items on different financial statements. 
D) of all ratios that increased or decreased over past accounting periods.

Question 18

_____________ ratio is capable of telling the user everything there is to know about a particular company.

Accepted Answer

The answer of _____________ ratio is capable of telling the...

Question 19

is a line item on the income statement to reflect the net income or loss of a discontinued business segment as well as any gain or loss incurred from its disposal.

Accepted Answer

Discontinu

Question 20

Squid Lips, Inc.wants to measure the relationship between profitability and the investment made by stockholders.Squid Lips should use the

Accepted Answer

A) return on stockholders' equity ratio. 
B) earnings per share. 
C) profit margin. 
D) statement of retained earnings. 
A) return on stockholders' equity ratio. 
B) earnings per share. 
C) profit margin. 
D) statement of retained earnings.

-Refer to the data for Computech Industries. Based on this information, what is Computech's number of days' sales in receivables assuming a 360 day year)?

An example of horizontal analysis is the increase in cost of goods sold by 29% from 2015 to 2016.

Pinecrest Company Use the selected data from Pinecrest Company's financial statements to answer the following question. -Refer to the data for Pinecrest Company. The amount of working capital at the end of 2016 is

Which of the following statements is generally considered desirable?

Sunshine Farm Supply Following are selected data from the financial statements of Sunshine Farm Supply: -Refer to the data for Sunshine Farm Supply. Which of the following would result from a horizontal analysis of its balance sheet?

Because discontinued segments of a business will not be part of the company's future operations, discontinued operations are disclosed separately on the income statement.

The return on sales ratio is a variation of the profit margin ratio.

Spring Market has an inventory turnover ratio of 15 times.Fall Market has a turnover of 14 times.Fall is more effective in managing inventory.

What is the best way to assess solvency? Explain.

The Starch Company experiences a 20% increase in sales over the previous year.However, gross profit actually decreased by 10% from the previous year.What are some of the possible causes for an increase in sales but a decline in gross profit?

Which of the following is a measure of the time that it takes to convert current assets into cash?

What is meant by a company's "long-term financial health"? Which side of the balance sheet is more informative for this issue? Explain.

Pinecrest Company Use the selected data from Pinecrest Company's financial statements to answer the following question. -Refer to the data for Pinecrest Company. The current ratio for 2016 is

is a line item on the income statement to reflect any gain or loss from an event that is both unusual in nature and infrequent in occurrence.

Which of the following ratios is the best measure in analyzing a company's ability to pay interest on long-term debt and to repay the long-term debt over several years?

Ware Company has a return on assets of 15% and a return on common stockholders' equity of 10%.John Ware, the president of the company, has asked you to explain the reason for this difference.What causes the difference? How is the concept of financial leverage involved?

Trend analysis is analysis

_____________ ratio is capable of telling the user everything there is to know about a particular company.

is a line item on the income statement to reflect the net income or loss of a discontinued business segment as well as any gain or loss incurred from its disposal.

Squid Lips, Inc.wants to measure the relationship between profitability and the investment made by stockholders.Squid Lips should use the

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

International Financial Reporting Standards

Filters

Exam 13: Financial Statement Analysis

-Refer to the data for Computech Industries. Based on this information, what is Computech's number of days' sales in receivables assuming a 360 day year)?

An example of horizontal analysis is the increase in cost of goods sold by 29% from 2015 to 2016.

Pinecrest Company Use the selected data from Pinecrest Company's financial statements to answer the following question. -Refer to the data for Pinecrest Company. The amount of working capital at the end of 2016 is

Which of the following statements is generally considered desirable?

Sunshine Farm Supply Following are selected data from the financial statements of Sunshine Farm Supply: -Refer to the data for Sunshine Farm Supply. Which of the following would result from a horizontal analysis of its balance sheet?

Because discontinued segments of a business will not be part of the company's future operations, discontinued operations are disclosed separately on the income statement.

The return on sales ratio is a variation of the profit margin ratio.

Spring Market has an inventory turnover ratio of 15 times.Fall Market has a turnover of 14 times.Fall is more effective in managing inventory.

What is the best way to assess solvency? Explain.

The Starch Company experiences a 20% increase in sales over the previous year.However, gross profit actually decreased by 10% from the previous year.What are some of the possible causes for an increase in sales but a decline in gross profit?

Which of the following is a measure of the time that it takes to convert current assets into cash?

What is meant by a company's "long-term financial health"? Which side of the balance sheet is more informative for this issue? Explain.

Pinecrest Company Use the selected data from Pinecrest Company's financial statements to answer the following question. -Refer to the data for Pinecrest Company. The current ratio for 2016 is

is a line item on the income statement to reflect any gain or loss from an event that is both unusual in nature and infrequent in occurrence.

Which of the following ratios is the best measure in analyzing a company's ability to pay interest on long-term debt and to repay the long-term debt over several years?

Ware Company has a return on assets of 15% and a return on common stockholders' equity of 10%.John Ware, the president of the company, has asked you to explain the reason for this difference.What causes the difference? How is the concept of financial leverage involved?

Trend analysis is analysis

_____________ ratio is capable of telling the user everything there is to know about a particular company.

is a line item on the income statement to reflect the net income or loss of a discontinued business segment as well as any gain or loss incurred from its disposal.

Squid Lips, Inc.wants to measure the relationship between profitability and the investment made by stockholders.Squid Lips should use the

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

International Financial Reporting Standards

Filters