Question 1

Indicate the type of each ratio listed below.
-Inventory turnover ratio

Accepted Answer

A) Liquidity ratio 
B) Solvency ratio 
C) Profitability ratio 
A) Liquidity ratio 
B) Solvency ratio 
C) Profitability ratio

Question 2

Vertical analysis is a comparison of financial statement items for a single company over a period of time.

Accepted Answer

A) True 
 B)False

Question 3

If the current ratio is 3 to 1 and the working capital is $100,000, then the current assets are

Accepted Answer

A)  $150,000 
B)  $200,000 
C)  $300,000 
D)  $450,000 
A)  $150,000 
B)  $200,000 
C)  $300,000 
D)  $450,000

Question 4

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 5

The current and quick ratios have two limitations. These ratios

Accepted Answer

A)  emphasize the ineffectiveness of analysts' calculations, and focus on liquid assets at a point in time instead of a period of time. 
B)  focus on cash instead of working capital, and they represent a point in time instead of covering a period of time. 
C)  focus on working capital instead of cash, and they represent a point in time instead of covering a period of time. 
D)  are ignored by most creditors, and focus on working capital instead of cash. 
A)  emphasize the ineffectiveness of analysts' calculations, and focus on liquid assets at a point in time instead of a period of time. 
B)  focus on cash instead of working capital, and they represent a point in time instead of covering a period of time. 
C)  focus on working capital instead of cash, and they represent a point in time instead of covering a period of time. 
D)  are ignored by most creditors, and focus on working capital instead of cash.

Question 6

The FASB requires a separate note in the financial statements to show the effects of inflation so that investors are able to compare statements more accurately.

Accepted Answer

A) True 
 B)False

Question 7

Sandy Shores, Inc. reported the following amounts in its financial statements:   From 2015 to 2016, the company's management of inventory is

Accepted Answer

A)  declining, because the number of days' sales in inventory is getting larger. 
B)  increasing, because the number of days' sales in inventory is getting larger. 
C)  declining, because the number of days' sales in inventory is getting smaller 
D)  increasing, because the number of days' sales in inventory is getting smaller 
A)  declining, because the number of days' sales in inventory is getting larger. 
B)  increasing, because the number of days' sales in inventory is getting larger. 
C)  declining, because the number of days' sales in inventory is getting smaller 
D)  increasing, because the number of days' sales in inventory is getting smaller

Question 8

Select the ratio that each statement below most properly satisfies.
-The relationship between dividends and the market price of a company's stock

Accepted Answer

A) Dividend yield ratio 
B) Cash flow from operations to capital expenditures ratio 
C) Debt service coverage ratio 
D) Return on common stockholders' equity ratio 
E) Times interest earned ratio
F)Asset turnover ratio
G)Debt-to-equity ratio
H)Dividend payout ratio
I)Price/earnings ratio 
A) Dividend yield ratio 
B) Cash flow from operations to capital expenditures ratio 
C) Debt service coverage ratio 
D) Return on common stockholders' equity ratio 
E) Times interest earned ratio
F)Asset turnover ratio
G)Debt-to-equity ratio
H)Dividend payout ratio
I)Price/earnings ratio

Question 9

Starship Inc.'s gross profit ratio increased from 36.5% in 2015 to 48.6% in 2016. What is the trend in this change?

Accepted Answer

A)  An upward trend 
B)  A downward trend 
C)  It depends on whether net sales increased or decreased during the period. 
D)  Trends cannot be determined without the dollar amount of the increase provided. 
A)  An upward trend 
B)  A downward trend 
C)  It depends on whether net sales increased or decreased during the period. 
D)  Trends cannot be determined without the dollar amount of the increase provided.

Question 10

Given below are several ratios. Select the accounts or amounts that would be used in order to calculate the ratio. You will have more than one response to each ratio. Some accounts or amounts may not be used at all. Select all that apply.
-Return on sales ratio

Accepted Answer

A)  Market price per share 
B)  Net sales 
C)  Gross profit 
D)  Average total assets 
E)  Interest expense, net of tax
F) Net income
G) Total liabilities
H) Total assets 
A)  Market price per share 
B)  Net sales 
C)  Gross profit 
D)  Average total assets 
E)  Interest expense, net of tax
F) Net income
G) Total liabilities
H) Total assets

Question 11

-Refer to the data for Computech Industries. Based on this information, what is the accounts receivable turnover for the current period?

Accepted Answer

A)  10.0 times 
B)  12.5 times 
C)  11.1 times 
D)  14.3 times 
A)  10.0 times 
B)  12.5 times 
C)  11.1 times 
D)  14.3 times

Question 12

Select the ratio that each statement below most properly satisfies.
-A measure of a company's success in earning a return for the common stockholders

Accepted Answer

A) Dividend yield ratio 
B) Cash flow from operations to capital expenditures ratio 
C) Debt service coverage ratio 
D) Return on common stockholders' equity ratio 
E) Times interest earned ratio
F)Asset turnover ratio
G)Debt-to-equity ratio
H)Dividend payout ratio
I)Price/earnings ratio 
A) Dividend yield ratio 
B) Cash flow from operations to capital expenditures ratio 
C) Debt service coverage ratio 
D) Return on common stockholders' equity ratio 
E) Times interest earned ratio
F)Asset turnover ratio
G)Debt-to-equity ratio
H)Dividend payout ratio
I)Price/earnings ratio

Question 13

Which of the following profitability ratios is most useful in indicating the "quality" of a company's earnings?

Accepted Answer

A)  Price/earnings ratio 
B)  Gross profit ratio 
C)  Dividend payout ratio 
D)  Dividend yield ratio 
A)  Price/earnings ratio 
B)  Gross profit ratio 
C)  Dividend payout ratio 
D)  Dividend yield ratio

Question 14

Indicate the type of each ratio listed below.
-Profit margin ratio

Accepted Answer

A) Liquidity ratio 
B) Solvency ratio 
C) Profitability ratio 
A) Liquidity ratio 
B) Solvency ratio 
C) Profitability ratio

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

The net assets of a company are equal to

Accepted Answer

A)  current assets less current liabilities. 
B)  total assets less current assets. 
C)  long-term assets less accumulated depreciation. 
D)  the stockholders' equity. 
A)  current assets less current liabilities. 
B)  total assets less current assets. 
C)  long-term assets less accumulated depreciation. 
D)  the stockholders' equity.

Question 17

Which profitability ratio requires the use of earnings per share in its calculation?

Accepted Answer

A)  Price/earnings ratio 
B)  Return on common stockholders' equity 
C)  Dividend yield ratio 
D)  Profit margin 
A)  Price/earnings ratio 
B)  Return on common stockholders' equity 
C)  Dividend yield ratio 
D)  Profit margin

Question 18

Which of the following generally indicates a positive change?

Accepted Answer

A)  Earnings per share decreases 
B)  The debt service coverage decreases 
C)  The acid-test ratio decreases 
D)  The number of days' sales in inventory decreases 
A)  Earnings per share decreases 
B)  The debt service coverage decreases 
C)  The acid-test ratio decreases 
D)  The number of days' sales in inventory decreases

Question 19

Which of the following is least useful in evaluating a company's financial statements?

Accepted Answer

A)  Comparison with government economic data for the economy as a whole 
B)  Comparison with other companies in the same industry 
C)  Comparison of the company's current period data with accounting data from 5 years ago 
D)  Comparison of the company's current period data with that of the last year 
A)  Comparison with government economic data for the economy as a whole 
B)  Comparison with other companies in the same industry 
C)  Comparison of the company's current period data with accounting data from 5 years ago 
D)  Comparison of the company's current period data with that of the last year

Question 20

Inventories and prepaid assets are excluded from the numerator used to compute the quick ratio.

Accepted Answer

A) True 
 B)False

Indicate the type of each ratio listed below. -Inventory turnover ratio

Vertical analysis is a comparison of financial statement items for a single company over a period of time.

If the current ratio is 3 to 1 and the working capital is $100,000, then the current assets are

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

The current and quick ratios have two limitations. These ratios

The FASB requires a separate note in the financial statements to show the effects of inflation so that investors are able to compare statements more accurately.

Sandy Shores, Inc. reported the following amounts in its financial statements: From 2015 to 2016, the company's management of inventory is

Select the ratio that each statement below most properly satisfies. -The relationship between dividends and the market price of a company's stock

Starship Inc.'s gross profit ratio increased from 36.5% in 2015 to 48.6% in 2016. What is the trend in this change?

Given below are several ratios. Select the accounts or amounts that would be used in order to calculate the ratio. You will have more than one response to each ratio. Some accounts or amounts may not be used at all. Select all that apply. -Return on sales ratio

-Refer to the data for Computech Industries. Based on this information, what is the accounts receivable turnover for the current period?

Select the ratio that each statement below most properly satisfies. -A measure of a company's success in earning a return for the common stockholders

Which of the following profitability ratios is most useful in indicating the "quality" of a company's earnings?

Indicate the type of each ratio listed below. -Profit margin ratio

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

The net assets of a company are equal to

Which profitability ratio requires the use of earnings per share in its calculation?

Which of the following generally indicates a positive change?

Which of the following is least useful in evaluating a company's financial statements?

Inventories and prepaid assets are excluded from the numerator used to compute the quick ratio.

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

Indicate the type of each ratio listed below. -Inventory turnover ratio

Vertical analysis is a comparison of financial statement items for a single company over a period of time.

If the current ratio is 3 to 1 and the working capital is $100,000, then the current assets are

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

The current and quick ratios have two limitations. These ratios

The FASB requires a separate note in the financial statements to show the effects of inflation so that investors are able to compare statements more accurately.

Sandy Shores, Inc. reported the following amounts in its financial statements: From 2015 to 2016, the company's management of inventory is

Select the ratio that each statement below most properly satisfies. -The relationship between dividends and the market price of a company's stock

Starship Inc.'s gross profit ratio increased from 36.5% in 2015 to 48.6% in 2016. What is the trend in this change?

Given below are several ratios. Select the accounts or amounts that would be used in order to calculate the ratio. You will have more than one response to each ratio. Some accounts or amounts may not be used at all. Select all that apply. -Return on sales ratio

-Refer to the data for Computech Industries. Based on this information, what is the accounts receivable turnover for the current period?

Select the ratio that each statement below most properly satisfies. -A measure of a company's success in earning a return for the common stockholders

Which of the following profitability ratios is most useful in indicating the "quality" of a company's earnings?

Indicate the type of each ratio listed below. -Profit margin ratio

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

The net assets of a company are equal to

Which profitability ratio requires the use of earnings per share in its calculation?

Which of the following generally indicates a positive change?

Which of the following is least useful in evaluating a company's financial statements?

Inventories and prepaid assets are excluded from the numerator used to compute the quick ratio.

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