Question 1

Which of the following is NOT a liquidity ratio?

Accepted Answer

A) Current ratio 
B) Accounts Payable payment period 
C) Accounts Receivable turnover ratio 
D) Receivables collection period 
A) Current ratio 
B) Accounts Payable payment period 
C) Accounts Receivable turnover ratio 
D) Receivables collection period

Question 2

Which of the following is NOT one of the steps in financial analysis?

Accepted Answer

A) Understanding the environment in which a business operates 
B) Analyzing a business' operations 
C) Preparing a business' financial statements 
D) Understanding a business' model and strategy 
A) Understanding the environment in which a business operates 
B) Analyzing a business' operations 
C) Preparing a business' financial statements 
D) Understanding a business' model and strategy

Question 3

If cash is $4,170 in 2016 and $3,370 in 2015, what is the percent increase or decrease from 2015 to 2016? (Round your final answer to two decimal places, X.XX%.)

Accepted Answer

A) +0.81%. 
B) +23.74%. 
C) -1.24%. 
D) +19.18%. 
A) +0.81%. 
B) +23.74%. 
C) -1.24%. 
D) +19.18%.

Question 4

The 2015 and 2016 balance sheets for Shadow Industries showed Cash of $7,600 and $9,100 respectively, Accounts Receivable of $16,000 and $18,000, respectively, Inventory of $11,000 and $8,000, respectively, and Accounts Payable of $5,300 and $7,300, respectively. Its 2016 Income Statement showed Net Sales of $103,000, Cost of Goods Sold of $65,000, and Net Income of $30,000. The cash conversion cycle for 2016 was: (Assume all Sales are credit sales. Round any intermediary calculations to two decimal places and your final answer to the nearest day.)

Accepted Answer

A) 149 days. 
B) 28 days. 
C) 42 days. 
D) 78 days. 
A) 149 days. 
B) 28 days. 
C) 42 days. 
D) 78 days.

Question 5

Which of the following measures the ability for a company to meet long-term obligations or take on more debt?

Accepted Answer

A) Return on equity 
B) Debt ratio 
C) Current ratio 
D) Debt turnover 
A) Return on equity 
B) Debt ratio 
C) Current ratio 
D) Debt turnover

Question 6

Which of the following statements is TRUE regarding the results of financial statement analysis?

Accepted Answer

A) They can be found in the management discussion and analysis section of the financial statements. 
B) They are most meaningful when compared to competitors in diverse industries. 
C) They identify whether or not fraud has taken place. 
D) They have limited value without a point of reference. 
A) They can be found in the management discussion and analysis section of the financial statements. 
B) They are most meaningful when compared to competitors in diverse industries. 
C) They identify whether or not fraud has taken place. 
D) They have limited value without a point of reference.

Question 7

Comparing your company with a competing company in the same category of business is called benchmarking.

Accepted Answer

A) True 
 B)False

Question 8

Keeping prices low is an example of a business strategy.

Accepted Answer

A) True 
 B)False

Question 9

A company's net income for the year ended was $290,000. Stockholders' Equity was $1,600,000 at the end of the year, and $1,400,000 at the beginning of the year. The return on equity would be: (Round your final answer to two decimal places, X.XX%)

Accepted Answer

A) 9.67%. 
B) 20.71%. 
C) 19.33%. 
D) 18.13%. 
A) 9.67%. 
B) 20.71%. 
C) 19.33%. 
D) 18.13%.

Question 10

Operating profit (EBIT)is first used to pay dividends to a company's stockholders.

Accepted Answer

A) True 
 B)False

Question 11

Mockingjay, Inc. reported the following for 2016:  
What are the earnings per share for Mockinjay, Inc.?: (Round your final answer to the nearest cent.)

Accepted Answer

A) $0.15/share 
B) $0.29/share 
C) $0.13/share 
D) $0.07/share 
A) $0.15/share 
B) $0.29/share 
C) $0.13/share 
D) $0.07/share

Question 12

Which of the following is NOT part of what a company's business model describes?

Accepted Answer

A) What products the company sells 
B) How to increase the customer base 
C) Who the company sells to 
D) What the company does 
A) What products the company sells 
B) How to increase the customer base 
C) Who the company sells to 
D) What the company does

Question 13

Current assets divided by current liabilities yields the:

Accepted Answer

A) quick ratio. 
B) current ratio. 
C) debt ratio. 
D) working capital ratio. 
A) quick ratio. 
B) current ratio. 
C) debt ratio. 
D) working capital ratio.

Question 14

Computing trend percentages over a period of years helps to indicate the direction in which the business is going.

Accepted Answer

A) True 
 B)False

Question 15

Horizontal analysis is only done on the Balance Sheet.

Accepted Answer

A) True 
 B)False

Question 16

A low price earnings ratio typically means the future of a business is very bright.

Accepted Answer

A) True 
 B)False

Question 17

If Sydney Tea's net sales decreased from $90,000in year 1 to $49,000 in year 2 and its cost of goods sold decreased from $33,000 in year 1 to $19,000 in year 2, the vertical analysis based on sales would show the following for cost of goods sold for the two periods: (Round your final answer to the nearest percentage.)

Accepted Answer

A) 37% and 39%. 
B) 39% and 37%. 
C) 273% and 258%. 
D) 258% and 273%. 
A) 37% and 39%. 
B) 39% and 37%. 
C) 273% and 258%. 
D) 258% and 273%.

Question 18

An acid test (quick ratio)of 0.75 would indicate:

Accepted Answer

A) a ratio that would allow a company to pay off current liabilities with quick assets. 
B) that for every $1 of quick assets, there are $0.75 in liabilities. 
C) that for every $1 of liabilities, there are $0.75 in quick assets. 
D) a ratio that would allow a company to pay off current liabilities with current assets. 
A) a ratio that would allow a company to pay off current liabilities with quick assets. 
B) that for every $1 of quick assets, there are $0.75 in liabilities. 
C) that for every $1 of liabilities, there are $0.75 in quick assets. 
D) a ratio that would allow a company to pay off current liabilities with current assets.

Question 19

A business's economic environment describes how a business:

Accepted Answer

A) competes for critical resources. 
B) is affected by the overall economy. 
C) creates a competitive advantage. 
D) compares to similar companies in industry. 
A) competes for critical resources. 
B) is affected by the overall economy. 
C) creates a competitive advantage. 
D) compares to similar companies in industry.

Question 20

Sydney Corporation the following for 2016:  
What is the dividend yield for Sydney Corporation? (Round your final answer to two decimal places, X.XX%.)

Accepted Answer

A) 9.35% 
B) 23.71% 
C) 48.76% 
D) 39.42% 
A) 9.35% 
B) 23.71% 
C) 48.76% 
D) 39.42%

Which of the following is NOT a liquidity ratio?

Which of the following is NOT one of the steps in financial analysis?

If cash is $4,170 in 2016 and $3,370 in 2015, what is the percent increase or decrease from 2015 to 2016? (Round your final answer to two decimal places, X.XX%.)

Which of the following measures the ability for a company to meet long-term obligations or take on more debt?

Which of the following statements is TRUE regarding the results of financial statement analysis?

Comparing your company with a competing company in the same category of business is called benchmarking.

Keeping prices low is an example of a business strategy.

A company's net income for the year ended was $290,000. Stockholders' Equity was $1,600,000 at the end of the year, and $1,400,000 at the beginning of the year. The return on equity would be: (Round your final answer to two decimal places, X.XX%)

Operating profit (EBIT)is first used to pay dividends to a company's stockholders.

Mockingjay, Inc. reported the following for 2016: What are the earnings per share for Mockinjay, Inc.?: (Round your final answer to the nearest cent.)

Which of the following is NOT part of what a company's business model describes?

Current assets divided by current liabilities yields the:

Computing trend percentages over a period of years helps to indicate the direction in which the business is going.

Horizontal analysis is only done on the Balance Sheet.

A low price earnings ratio typically means the future of a business is very bright.

An acid test (quick ratio)of 0.75 would indicate:

A business's economic environment describes how a business:

Sydney Corporation the following for 2016: What is the dividend yield for Sydney Corporation? (Round your final answer to two decimal places, X.XX%.)

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Filters

Exam 12: Financial Statement Analysis

Which of the following is NOT a liquidity ratio?

Which of the following is NOT one of the steps in financial analysis?

If cash is $4,170 in 2016 and $3,370 in 2015, what is the percent increase or decrease from 2015 to 2016? (Round your final answer to two decimal places, X.XX%.)

Which of the following measures the ability for a company to meet long-term obligations or take on more debt?

Which of the following statements is TRUE regarding the results of financial statement analysis?

Comparing your company with a competing company in the same category of business is called benchmarking.

Keeping prices low is an example of a business strategy.

A company's net income for the year ended was $290,000. Stockholders' Equity was $1,600,000 at the end of the year, and $1,400,000 at the beginning of the year. The return on equity would be: (Round your final answer to two decimal places, X.XX%)

Operating profit (EBIT)is first used to pay dividends to a company's stockholders.

Mockingjay, Inc. reported the following for 2016: What are the earnings per share for Mockinjay, Inc.?: (Round your final answer to the nearest cent.)

Which of the following is NOT part of what a company's business model describes?

Current assets divided by current liabilities yields the:

Computing trend percentages over a period of years helps to indicate the direction in which the business is going.

Horizontal analysis is only done on the Balance Sheet.

A low price earnings ratio typically means the future of a business is very bright.

An acid test (quick ratio)of 0.75 would indicate:

A business's economic environment describes how a business:

Sydney Corporation the following for 2016: What is the dividend yield for Sydney Corporation? (Round your final answer to two decimal places, X.XX%.)

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Filters