Question 1

Match each ratio that follows to its use (items a-h). Items may be used more than once.
-working capital

Accepted Answer

A) assess the profitability of the assets 
B) assess how effectively assets are used 
C) indicate the ability to pay current liabilities 
D) indicate how much of the company is financed by debt and equity 
E) indicate instant debt-paying ability
F)assess the profitability of the investment by common stockholders
G)indicate future earnings prospects
H)indicate the extent to which earnings are being distributed to common stockholders 
A) assess the profitability of the assets 
B) assess how effectively assets are used 
C) indicate the ability to pay current liabilities 
D) indicate how much of the company is financed by debt and equity 
E) indicate instant debt-paying ability
F)assess the profitability of the investment by common stockholders
G)indicate future earnings prospects
H)indicate the extent to which earnings are being distributed to common stockholders

Question 2

In computing the asset turnover ratio, long-term investments are excluded from average total assets.

Accepted Answer

A) True 
 B)False

Question 3

The balance sheet for Seuss Company at the end of the current fiscal year indicated the following:   Income before income tax was $1,500,000 and income taxes were $200,000 for the current year. Cash dividends paid on common stock during the current year totaled $150,000. The common stock sells for $75 per share at the end of the year.​
Determine each of the following:   Round to one decimal place except earnings per share and dividends per share, which should be rounded to two decimal places.

Accepted Answer

The answer of The balance sheet for Seuss Company at...

Question 4

The following data are taken from the financial statements:   (a)Determine for each year (1) the inventory turnover, round answer to one decimal place.(2) the number of days' sales in inventory. Round intermediate calculations to whole numbers and final answers to two decimal places.(b)Comment on the favorable and unfavorable trends revealed by the data.

Accepted Answer

(a)Current
Preceding
Year
Year
(1)Cost o

Question 5

A firm selling food should have higher inventory turnover rate than a firm selling office furniture.

Accepted Answer

A) True 
 B)False

Question 6

The following items were taken from the financial statements of Tilden, Inc., over a three-year period:   Compute the following for each of the items listed.​
(a)The amount and percentage change from Year 2 to Year 3.(b)The amount and percentage change from Year 1 to Year 2.Round percentages to one decimal place.

Accepted Answer

The answer of The following items were taken from the...

Question 7

-Based on the data for Privett Company, what is the amount of quick assets?

Accepted Answer

A) $168,000 
B) $96,000 
C) $60,000 
D) $61,000 
A) $168,000 
B) $96,000 
C) $60,000 
D) $61,000

Question 8

Dollar amounts of working capital are difficult to assess when comparing companies of different sizes or in comparing such amounts with industry figures.

Accepted Answer

A) True 
 B)False

Question 9

The percentage analysis of increases and decreases in individual items in comparative financial statements is called

Accepted Answer

A) vertical analysis 
B) solvency analysis 
C) profitability analysis 
D) horizontal analysis 
A) vertical analysis 
B) solvency analysis 
C) profitability analysis 
D) horizontal analysis

Question 10

In a common-sized income statement, each item is expressed as a percentage of net income.

Accepted Answer

A) True 
 B)False

Question 11

A change from one acceptable accounting method to another is reported

Accepted Answer

A) on the statement of stockholders' equity, as a correction to the beginning balance 
B) on the income statement, below income from continuing operations 
C) on the income statement, above income tax expense 
D) through a retroactive restatement of prior-period earnings 
A) on the statement of stockholders' equity, as a correction to the beginning balance 
B) on the income statement, below income from continuing operations 
C) on the income statement, above income tax expense 
D) through a retroactive restatement of prior-period earnings

Question 12

The number of days' sales in inventory is one means of expressing the relationship between the cost of goods sold and inventory.

Accepted Answer

A) True 
 B)False

Question 13

Analyzing a company's performance should take into account conditions peculiar to the industry and the general economic conditions.

Accepted Answer

A) True 
 B)False

Question 14

All of the following are typically included in the management's discussion and analysis in annual reports except

Accepted Answer

A) explanations of any significant changes between the current and prior years' financial statements 
B) management's assessment of liquidity 
C) journal entries 
D) off-balance-sheet arrangements 
A) explanations of any significant changes between the current and prior years' financial statements 
B) management's assessment of liquidity 
C) journal entries 
D) off-balance-sheet arrangements

Question 15

Match each ratio that follows to its use (items a-h). Items may be used more than once.
-Cash and accounts receivable for Adams Company are provided below:   What is the amount and percentage of increase or decrease that would be shown with horizontal analysis?
A)assess the profitability of the assets
B)assess how effectively assets are used
C)indicate the ability to pay current liabilities
D)indicate how much of the company is financed by debt and equity
E)indicate instant debt-paying ability
F)assess the profitability of the investment by common stockholders
G)indicate future earnings prospects
H)indicate the extent to which earnings are being distributed to common stockholders

Accepted Answer

Cash
$20,000 increase ($70,000

Question 16

Match each ratio that follows to its use (items a-h). Items may be used more than once.
-asset turnover ratio

Accepted Answer

A) assess the profitability of the assets 
B) assess how effectively assets are used 
C) indicate the ability to pay current liabilities 
D) indicate how much of the company is financed by debt and equity 
E) indicate instant debt-paying ability
F)assess the profitability of the investment by common stockholders
G)indicate future earnings prospects
H)indicate the extent to which earnings are being distributed to common stockholders 
A) assess the profitability of the assets 
B) assess how effectively assets are used 
C) indicate the ability to pay current liabilities 
D) indicate how much of the company is financed by debt and equity 
E) indicate instant debt-paying ability
F)assess the profitability of the investment by common stockholders
G)indicate future earnings prospects
H)indicate the extent to which earnings are being distributed to common stockholders

Question 17

Income statement information for Sadie Company is below:   Using vertical analysis of the income statement for Sadie Company, determine the gross profit margin.

Accepted Answer

A) 100% 
B) 66% 
C) 34% 
D) 29% 
A) 100% 
B) 66% 
C) 34% 
D) 29%

Question 18

The numerator in calculating the accounts receivable turnover is

Accepted Answer

A) total assets 
B) sales 
C) accounts receivable at year-end 
D) average accounts receivable 
A) total assets 
B) sales 
C) accounts receivable at year-end 
D) average accounts receivable

Question 19

The balance sheets at the end of each of the first two years of operations indicate the following:  
-Using the balance sheets for Kellman Company, if net income is $150,000 and interest expense is $20,000 for Year 2, what is the return on total assets for the year?

Accepted Answer

A) 10.4% 
B) 11.9% 
C) 10.5% 
D) 8.4% 
A) 10.4% 
B) 11.9% 
C) 10.5% 
D) 8.4%

Question 20

-Based on the data for Harding Company, what is the amount of working capital?

Accepted Answer

A) $238,000 
B) $128,000 
C) $168,000 
D) $203,000 
A) $238,000 
B) $128,000 
C) $168,000 
D) $203,000

Exam 14: Financial Statement Analysis

Match each ratio that follows to its use (items a-h). Items may be used more than once. -working capital

In computing the asset turnover ratio, long-term investments are excluded from average total assets.

A firm selling food should have higher inventory turnover rate than a firm selling office furniture.

-Based on the data for Privett Company, what is the amount of quick assets?

Dollar amounts of working capital are difficult to assess when comparing companies of different sizes or in comparing such amounts with industry figures.

The percentage analysis of increases and decreases in individual items in comparative financial statements is called

In a common-sized income statement, each item is expressed as a percentage of net income.

A change from one acceptable accounting method to another is reported

The number of days' sales in inventory is one means of expressing the relationship between the cost of goods sold and inventory.

Analyzing a company's performance should take into account conditions peculiar to the industry and the general economic conditions.

All of the following are typically included in the management's discussion and analysis in annual reports except

Match each ratio that follows to its use (items a-h). Items may be used more than once. -asset turnover ratio

Income statement information for Sadie Company is below: Using vertical analysis of the income statement for Sadie Company, determine the gross profit margin.

The numerator in calculating the accounts receivable turnover is

The balance sheets at the end of each of the first two years of operations indicate the following: -Using the balance sheets for Kellman Company, if net income is $150,000 and interest expense is $20,000 for Year 2, what is the return on total assets for the year?

-Based on the data for Harding Company, what is the amount of working capital?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Support Department and Joint Cost Allocation

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

The Balanced Scorecard and Corporate Social Responsibility

Investments

Filters