Question 1

Operating assets exclude investments, land, and intangibles from the asset base.

Accepted Answer

A) True 
 B)False

Question 2

Which suppliers of funds bear the greatest risk and should therefore earn the greatest return?

Accepted Answer

A)  bondholders 
B)  suppliers 
C)  general creditors such as banks 
D)  preferred shareholders 
E)  common shareholders 
A)  bondholders 
B)  suppliers 
C)  general creditors such as banks 
D)  preferred shareholders 
E)  common shareholders

Question 3

Changes in the cost of goods sold can have a substantial impact on gross profit margin.

Accepted Answer

A) True 
 B)False

Question 4

The operating ratios may give significantly different results from net earnings ratios if a firm has large amounts of nonoperating assets generating income.

Accepted Answer

A) True 
 B)False

Question 5

An interim period is a fiscal period less than one year.

Accepted Answer

A) True 
 B)False

Question 6

High fixed costs in a period of low activity can cause a low net profit margin.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following ratios will usually have the lowest percent?

Accepted Answer

A)  return on investment 
B)  return on total equity 
C)  return on common equity 
D)  return on total assets 
E)  there is not enough information to tell 
A)  return on investment 
B)  return on total equity 
C)  return on common equity 
D)  return on total assets 
E)  there is not enough information to tell

Question 8

Segment data contain information about geographic markets, including foreign countries.

Accepted Answer

A) True 
 B)False

Question 9

Return on investment will typically be lower than return on equity.

Accepted Answer

A) True 
 B)False

Operating assets exclude investments, land, and intangibles from the asset base.

Which suppliers of funds bear the greatest risk and should therefore earn the greatest return?

Changes in the cost of goods sold can have a substantial impact on gross profit margin.

The operating ratios may give significantly different results from net earnings ratios if a firm has large amounts of nonoperating assets generating income.

An interim period is a fiscal period less than one year.

High fixed costs in a period of low activity can cause a low net profit margin.

Which of the following ratios will usually have the lowest percent?

Segment data contain information about geographic markets, including foreign countries.

Return on investment will typically be lower than return on equity.

Introduction to Financial Reporting

Introduction to Financial Statements and Other Financial Reporting Topics

Balance Sheet

Income Statement

Basics of Analysis

Liquidity of Short-Term Assets; Related Debt-Paying Ability

Long-Term Debt-Paying Ability

For the Investor

Statement of Cash Flows

Expanded Analysis

Special Industries: Banks, Utilities, Oil and Gas, Transportation, Insurance, Real Estate Companies

Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations

Filters

Exam 8: Profitability

Operating assets exclude investments, land, and intangibles from the asset base.

Which suppliers of funds bear the greatest risk and should therefore earn the greatest return?

Changes in the cost of goods sold can have a substantial impact on gross profit margin.

The operating ratios may give significantly different results from net earnings ratios if a firm has large amounts of nonoperating assets generating income.

An interim period is a fiscal period less than one year.

High fixed costs in a period of low activity can cause a low net profit margin.

Which of the following ratios will usually have the lowest percent?

Segment data contain information about geographic markets, including foreign countries.

Return on investment will typically be lower than return on equity.

Introduction to Financial Reporting

Introduction to Financial Statements and Other Financial Reporting Topics

Balance Sheet

Income Statement

Basics of Analysis

Liquidity of Short-Term Assets; Related Debt-Paying Ability

Long-Term Debt-Paying Ability

For the Investor

Statement of Cash Flows

Expanded Analysis

Special Industries: Banks, Utilities, Oil and Gas, Transportation, Insurance, Real Estate Companies

Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations

Filters