Question 1

Hornish Co. had net sales of $5,265 million and accounts receivable of $225 million. Its days' sales uncollected was:

Accepted Answer

A)  81.8. 
B)  19.4. 
C)  2.98. 
D)  65.2. 
E)  15.6. 
A)  81.8. 
B)  19.4. 
C)  2.98. 
D)  65.2. 
E)  15.6.

Question 2

A share's market value is affected by:

Accepted Answer

A)  Expected growth in dividends. 
B)  Expected business opportunities. 
C)  Expected growth in earnings and dividends. 
D)  Expected growth in earnings. 
E)  All of these answers are correct. 
A)  Expected growth in dividends. 
B)  Expected business opportunities. 
C)  Expected growth in earnings and dividends. 
D)  Expected growth in earnings. 
E)  All of these answers are correct.

Question 3

Seinfield Corporation had cash of $16,000 and total assets of $178,300. The common-size percent for cash was 7.85%.

Accepted Answer

A) True 
 B)False

Question 4

The acid-test ratio is a more accurate measure of a company's liquidity than the current ratio.

Accepted Answer

A) True 
 B)False

Question 5

General-purpose financial statements include the 1) income statement, 2) balance sheet, 3) statement of changes in equity, 4) statement of cash flows, and 5) notes related to the statements.

Accepted Answer

A) True 
 B)False

Question 6

Industry standards for financial statement analysis:

Accepted Answer

A)  Are based on rules of thumb. 
B)  Are set by the company's industry. 
C)  Are based on a company's prior performance. 
D)  Are set by competitors. 
E)  Are based on a company's prior performance and on rules of thumb. 
A)  Are based on rules of thumb. 
B)  Are set by the company's industry. 
C)  Are based on a company's prior performance. 
D)  Are set by competitors. 
E)  Are based on a company's prior performance and on rules of thumb.

Question 7

CrossSport had average total assets of $697,000. Its gross sales were $3,090,000 and its net sales were $2,000,000. CrossSport's total asset turnover was:

Accepted Answer

A)  2.87. 
B)  .64. 
C)  .34. 
D)  1.2. 
E)  .82. 
A)  2.87. 
B)  .64. 
C)  .34. 
D)  1.2. 
E)  .82.

Question 8

For trend analysis, the percent change is completed by subtracting the analysis periodamount from the base period amount, dividing the result by the base period amount and multiplying that result by 100.

Accepted Answer

A) True 
 B)False

Question 9

Analytical tools comparing a company's financial condition and performance across time are:

Accepted Answer

A)  Financial analysis. 
B)  Horizontal analysis. 
C)  Vertical analysis. 
D)  Investment analysis. 
E)  Ratio analysis. 
A)  Financial analysis. 
B)  Horizontal analysis. 
C)  Vertical analysis. 
D)  Investment analysis. 
E)  Ratio analysis.

Question 10

Comparison standards for financial statement analysis include:

Accepted Answer

A)  Industry. 
B)  Competition. 
C)  Intracompany. 
D)  Guidelines. 
E)  All of these answers are correct. 
A)  Industry. 
B)  Competition. 
C)  Intracompany. 
D)  Guidelines. 
E)  All of these answers are correct.

Question 11

Firms with an accounts payable turnover rate that is faster than the industry norm are:

Accepted Answer

A)  Paying creditors faster than the norm. 
B)  Paying creditors faster than the norm and managing their payments to suppliers well. 
C)  In financial difficulty. 
D)  Paying creditors faster than the norm and are in financial difficulty. 
E)  Managing their payments to suppliers well. 
A)  Paying creditors faster than the norm. 
B)  Paying creditors faster than the norm and managing their payments to suppliers well. 
C)  In financial difficulty. 
D)  Paying creditors faster than the norm and are in financial difficulty. 
E)  Managing their payments to suppliers well.

Question 12

The pledged assets to secured liabilities ratio is calculated by dividing secured liabilities by pledged assets.

Accepted Answer

A) True 
 B)False

Question 13

The number of days' sales uncollected:

Accepted Answer

A)  Is used to compare a company to other companies in the same industry and is used to compare between current and prior periods. 
B)  Is used to compare between current and prior periods. 
C)  Is used to compare a company to other companies in the same industry. 
D)  Measures how much time is likely to pass before a company receives cash receipts from credit sales equal to the current amount of accounts receivable. 
E)  All of these answers are correct. 
A)  Is used to compare a company to other companies in the same industry and is used to compare between current and prior periods. 
B)  Is used to compare between current and prior periods. 
C)  Is used to compare a company to other companies in the same industry. 
D)  Measures how much time is likely to pass before a company receives cash receipts from credit sales equal to the current amount of accounts receivable. 
E)  All of these answers are correct.

Question 14

The current ratio is used to evaluate the ability of a business to meet its short-term obligations.

Accepted Answer

A) True 
 B)False

Question 15

The building blocks of financial statement analysis include:

Accepted Answer

A)  Solvency. 
B)  Liquidity and efficiency. 
C)  Profitability. 
D)  Market. 
E)  All of these answers are correct. 
A)  Solvency. 
B)  Liquidity and efficiency. 
C)  Profitability. 
D)  Market. 
E)  All of these answers are correct.

Question 16

Evaluation of company performance includes:

Accepted Answer

A)  Current financial position. 
B)  Future performance and risk. 
C)  Current performance. 
D)  Past performance. 
E)  All of these answers are correct. 
A)  Current financial position. 
B)  Future performance and risk. 
C)  Current performance. 
D)  Past performance. 
E)  All of these answers are correct.

Question 17

Comparative financial statements are reports where financial amounts are placed side by side in columns on a single statement for analysis purposes.

Accepted Answer

A) True 
 B)False

Question 18

CompUS has pledged $275,000 worth of its assets. The total book value of its assets is$625,000. The firm's total liabilities are $750,000. The secured liabilities are $150,000. The pledged assets to secured liabilities is:

Accepted Answer

A)  2.3. 
B)  2.7. 
C)  5.0. 
D)  1.8. 
E)  1.2. 
A)  2.3. 
B)  2.7. 
C)  5.0. 
D)  1.8. 
E)  1.2.

Question 19

Common-size financial statements are useful in:

Accepted Answer

A)  Analyzing income statements. 
B)  Analyzing companies of different sizes. 
C)  Comparing different geographical regions of a company. 
D)  Alerting users of differences that should be explored and explained. 
E)  All of these answers are correct. 
A)  Analyzing income statements. 
B)  Analyzing companies of different sizes. 
C)  Comparing different geographical regions of a company. 
D)  Alerting users of differences that should be explored and explained. 
E)  All of these answers are correct.

Question 20

The days' sales in inventory is calculated by dividing ending inventory by cost of goods sold and multiplying the result by 365.

Accepted Answer

A) True 
 B)False

Hornish Co. had net sales of $5,265 million and accounts receivable of $225 million. Its days' sales uncollected was:

A share's market value is affected by:

Seinfield Corporation had cash of $16,000 and total assets of $178,300. The common-size percent for cash was 7.85%.

The acid-test ratio is a more accurate measure of a company's liquidity than the current ratio.

General-purpose financial statements include the 1) income statement, 2) balance sheet, 3) statement of changes in equity, 4) statement of cash flows, and 5) notes related to the statements.

Industry standards for financial statement analysis:

CrossSport had average total assets of $697,000. Its gross sales were $3,090,000 and its net sales were $2,000,000. CrossSport's total asset turnover was:

For trend analysis, the percent change is completed by subtracting the analysis periodamount from the base period amount, dividing the result by the base period amount and multiplying that result by 100.

Analytical tools comparing a company's financial condition and performance across time are:

Comparison standards for financial statement analysis include:

Firms with an accounts payable turnover rate that is faster than the industry norm are:

The pledged assets to secured liabilities ratio is calculated by dividing secured liabilities by pledged assets.

The number of days' sales uncollected:

The current ratio is used to evaluate the ability of a business to meet its short-term obligations.

The building blocks of financial statement analysis include:

Evaluation of company performance includes:

Comparative financial statements are reports where financial amounts are placed side by side in columns on a single statement for analysis purposes.

CompUS has pledged $275,000 worth of its assets. The total book value of its assets is$625,000. The firm's total liabilities are $750,000. The secured liabilities are $150,000. The pledged assets to secured liabilities is:

Common-size financial statements are useful in:

The days' sales in inventory is calculated by dividing ending inventory by cost of goods sold and multiplying the result by 365.

Property, Plant and Equipment and Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Profit, Earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Filters

Exam 17: Analyzing Financial Statements

Hornish Co. had net sales of $5,265 million and accounts receivable of $225 million. Its days' sales uncollected was:

A share's market value is affected by:

Seinfield Corporation had cash of $16,000 and total assets of $178,300. The common-size percent for cash was 7.85%.

The acid-test ratio is a more accurate measure of a company's liquidity than the current ratio.

General-purpose financial statements include the 1) income statement, 2) balance sheet, 3) statement of changes in equity, 4) statement of cash flows, and 5) notes related to the statements.

Industry standards for financial statement analysis:

CrossSport had average total assets of $697,000. Its gross sales were $3,090,000 and its net sales were $2,000,000. CrossSport's total asset turnover was:

For trend analysis, the percent change is completed by subtracting the analysis periodamount from the base period amount, dividing the result by the base period amount and multiplying that result by 100.

Analytical tools comparing a company's financial condition and performance across time are:

Comparison standards for financial statement analysis include:

Firms with an accounts payable turnover rate that is faster than the industry norm are:

The pledged assets to secured liabilities ratio is calculated by dividing secured liabilities by pledged assets.

The number of days' sales uncollected:

The current ratio is used to evaluate the ability of a business to meet its short-term obligations.

The building blocks of financial statement analysis include:

Evaluation of company performance includes:

Comparative financial statements are reports where financial amounts are placed side by side in columns on a single statement for analysis purposes.

CompUS has pledged $275,000 worth of its assets. The total book value of its assets is$625,000. The firm's total liabilities are $750,000. The secured liabilities are $150,000. The pledged assets to secured liabilities is:

Common-size financial statements are useful in:

The days' sales in inventory is calculated by dividing ending inventory by cost of goods sold and multiplying the result by 365.

Property, Plant and Equipment and Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Profit, Earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Filters