Question 1

A price-earnings ratio of 10 to 1 implies an earnings rate on market value per share of 10%.

Accepted Answer

A) True 
 B)False

Question 2

An unqualified opinion is given if an audit has not been completed.

Accepted Answer

A) True 
 B)False

Question 3

Ratio analysis is aided by the presentation of comparative statements.

Accepted Answer

A) True 
 B)False

Question 4

The rule of thumb for the quick ratio is 1:1.When would a quick ratio below this threshold not necessarily be a concern for a company?

Accepted Answer

A) When inventories are high 
B) When accounts receivable balances are high 
C) When cash flows are steady and reliable 
D) None of these choices are correct 
A) When inventories are high 
B) When accounts receivable balances are high 
C) When cash flows are steady and reliable 
D) None of these choices are correct

Question 5

Assume the following facts for XYZ in 000's:   XYZ's return on owners' equity, return on total assets, and leverage percentages (rounded to the nearest percent)are: (Round percentage answers to nearest whole percent: Do not round intermediate calculations.)

Accepted Answer

A) Choice 1 
B) Choice 2 
C) Choice 3 
D) Choice 4 
E) Choice 5 
A) Choice 1 
B) Choice 2 
C) Choice 3 
D) Choice 4 
E) Choice 5

Question 6

The rule of thumb for the current ratio is 2:1.When would a current ratio below this threshold not necessarily be a concern for a company?

Accepted Answer

A) When cash flows are steady and reliable 
B) When inventories are high 
C) When accounts receivable balances are high 
D) None of these choices are correct 
A) When cash flows are steady and reliable 
B) When inventories are high 
C) When accounts receivable balances are high 
D) None of these choices are correct

Question 7

You are given the following information about JMR Corp.:   What is JMR's quick ratio? (Round final answer to 2 decimal places)

Accepted Answer

A) 1)67:1 
B) 0)23:1 
C) 0)46:1 
D) 1)23:1 
A) 1)67:1 
B) 0)23:1 
C) 0)46:1 
D) 1)23:1

Question 8

The amount of working capital would not be affected by which of the following transactions?

Accepted Answer

A) Transfer of a long-term investment for cash 
B) Issuance of a long-term note in exchange for cash 
C) Sale of long-term investments for cash at a loss 
D) Issuance of common shares of the corporation in exchange for noncurrent assets 
E) All of these choices would affect working capital 
A) Transfer of a long-term investment for cash 
B) Issuance of a long-term note in exchange for cash 
C) Sale of long-term investments for cash at a loss 
D) Issuance of common shares of the corporation in exchange for noncurrent assets 
E) All of these choices would affect working capital

Question 9

Selected information for HIJ in 000's is as follows:   HIJ's return on average common shareholders' equity, rounded to the nearest percentage point, for 2014 is: (Round percentage answer to nearest whole percent)

Accepted Answer

A) 19 percent. 
B) 17 percent. 
C) 23 percent. 
D) 15 percent. 
E) None of these choices are correct. 
A) 19 percent. 
B) 17 percent. 
C) 23 percent. 
D) 15 percent. 
E) None of these choices are correct.

Question 10

As an industry analyst comparing a firm to the industry, are you likely to praise or criticize the firm in terms of Debt/Total Asset.

Accepted Answer

Debt/Total Asset @#IMG-DLM& While the co

Question 11

A company has a current ratio of 2 to 1.This ratio will decrease if the company:

Accepted Answer

A) sells merchandise for more than cost and records the sale using the perpetual inventory method. 
B) pays a large account payable which had been a current liability. 
C) borrows cash on a six-month note. 
D) receives a 5 percent stock dividend on one of its marketable securities. 
E) None of these choices are correct. 
A) sells merchandise for more than cost and records the sale using the perpetual inventory method. 
B) pays a large account payable which had been a current liability. 
C) borrows cash on a six-month note. 
D) receives a 5 percent stock dividend on one of its marketable securities. 
E) None of these choices are correct.

Question 12

The issuance of a stock dividend would improve a company's debt-to-equity ratio.

Accepted Answer

A) True 
 B)False

Question 13

All companies are required to have audits.

Accepted Answer

A) True 
 B)False

Question 14

Information concerning XYZ's common shares is as follows:   What was the price-earnings ratio on common shares for 2014?

Accepted Answer

A) 2)67 to 1 
B) 3 to 1 
C) 4 to 1 
D) 2 to 1 
E) None of these choices are correct. 
A) 2)67 to 1 
B) 3 to 1 
C) 4 to 1 
D) 2 to 1 
E) None of these choices are correct.

Question 15

In a popular business journal, JMR Ltd.financial data for the last five years was compared.This is an example of:

Accepted Answer

A) Yearly comparison. 
B) Longitudinal comparison. 
C) Industrial comparison. 
D) Cross-sectional comparison. 
A) Yearly comparison. 
B) Longitudinal comparison. 
C) Industrial comparison. 
D) Cross-sectional comparison.

Question 16

If a company's ratio of net income to net sales (generally referred to as profit margin)is low, then return on investment will be low.

Accepted Answer

A) True 
 B)False

Question 17

A company may decide not to follow GAAP if it does not present them in a favourable position.

Accepted Answer

A) True 
 B)False

Question 18

You are given the following information about JMR Corp.:   What is JMR's current ratio? (Round final answer to 2 decimal places)

Accepted Answer

A) 1)67:1 
B) 0)37:1 
C) 1)23:1 
D) 0)62:1 
A) 1)67:1 
B) 0)37:1 
C) 1)23:1 
D) 0)62:1

Question 19

Financial statement analysis is only used to determine whether a company is worth investing in.

Accepted Answer

A) True 
 B)False

Question 20

All of the following may be included in the numerator of the debt-to-equity ratio except:

Accepted Answer

A) Shareholder loans. 
B) Retractable preferred shares. 
C) Short-term bank loans. 
D) Current portion of long-term debt. 
A) Shareholder loans. 
B) Retractable preferred shares. 
C) Short-term bank loans. 
D) Current portion of long-term debt.

A price-earnings ratio of 10 to 1 implies an earnings rate on market value per share of 10%.

An unqualified opinion is given if an audit has not been completed.

Ratio analysis is aided by the presentation of comparative statements.

The rule of thumb for the quick ratio is 1:1.When would a quick ratio below this threshold not necessarily be a concern for a company?

Assume the following facts for XYZ in 000's: XYZ's return on owners' equity, return on total assets, and leverage percentages (rounded to the nearest percent)are: (Round percentage answers to nearest whole percent: Do not round intermediate calculations.)

The rule of thumb for the current ratio is 2:1.When would a current ratio below this threshold not necessarily be a concern for a company?

You are given the following information about JMR Corp.: What is JMR's quick ratio? (Round final answer to 2 decimal places)

The amount of working capital would not be affected by which of the following transactions?

Selected information for HIJ in 000's is as follows: HIJ's return on average common shareholders' equity, rounded to the nearest percentage point, for 2014 is: (Round percentage answer to nearest whole percent)

As an industry analyst comparing a firm to the industry, are you likely to praise or criticize the firm in terms of Debt/Total Asset.

A company has a current ratio of 2 to 1.This ratio will decrease if the company:

The issuance of a stock dividend would improve a company's debt-to-equity ratio.

All companies are required to have audits.

Information concerning XYZ's common shares is as follows: What was the price-earnings ratio on common shares for 2014?

In a popular business journal, JMR Ltd.financial data for the last five years was compared.This is an example of:

If a company's ratio of net income to net sales (generally referred to as profit margin)is low, then return on investment will be low.

A company may decide not to follow GAAP if it does not present them in a favourable position.

You are given the following information about JMR Corp.: What is JMR's current ratio? (Round final answer to 2 decimal places)

Financial statement analysis is only used to determine whether a company is worth investing in.

All of the following may be included in the numerator of the debt-to-equity ratio except:

Financial Liabilities and Provisions

Financial Instruments: Long-Term Debt

Shareholders Equity

Financial Instruments: Complex Debt and Equity

Corporate Income Tax

Tax Losses

Leases

Post-Employment Benefits

Earnings Per Share

Accounting Changes

Filters

Exam 22: Financial Statement Analysis

A price-earnings ratio of 10 to 1 implies an earnings rate on market value per share of 10%.

An unqualified opinion is given if an audit has not been completed.

Ratio analysis is aided by the presentation of comparative statements.

The rule of thumb for the quick ratio is 1:1.When would a quick ratio below this threshold not necessarily be a concern for a company?

Assume the following facts for XYZ in 000's: XYZ's return on owners' equity, return on total assets, and leverage percentages (rounded to the nearest percent)are: (Round percentage answers to nearest whole percent: Do not round intermediate calculations.)

The rule of thumb for the current ratio is 2:1.When would a current ratio below this threshold not necessarily be a concern for a company?

You are given the following information about JMR Corp.: What is JMR's quick ratio? (Round final answer to 2 decimal places)

The amount of working capital would not be affected by which of the following transactions?

Selected information for HIJ in 000's is as follows: HIJ's return on average common shareholders' equity, rounded to the nearest percentage point, for 2014 is: (Round percentage answer to nearest whole percent)

As an industry analyst comparing a firm to the industry, are you likely to praise or criticize the firm in terms of Debt/Total Asset.

A company has a current ratio of 2 to 1.This ratio will decrease if the company:

The issuance of a stock dividend would improve a company's debt-to-equity ratio.

All companies are required to have audits.

Information concerning XYZ's common shares is as follows: What was the price-earnings ratio on common shares for 2014?

In a popular business journal, JMR Ltd.financial data for the last five years was compared.This is an example of:

If a company's ratio of net income to net sales (generally referred to as profit margin)is low, then return on investment will be low.

A company may decide not to follow GAAP if it does not present them in a favourable position.

You are given the following information about JMR Corp.: What is JMR's current ratio? (Round final answer to 2 decimal places)

Financial statement analysis is only used to determine whether a company is worth investing in.

All of the following may be included in the numerator of the debt-to-equity ratio except:

Financial Liabilities and Provisions

Financial Instruments: Long-Term Debt

Shareholders Equity

Financial Instruments: Complex Debt and Equity

Corporate Income Tax

Tax Losses

Leases

Post-Employment Benefits

Earnings Per Share

Accounting Changes

Filters