Question 1

A high dividend yield means that stockholders are receiving a large return in the form of dividends.

Accepted Answer

A) True 
 B)False

Question 2

The purpose of financial analysis is to see how revenue changes over time.

Accepted Answer

A) True 
 B)False

Question 3

Cersei's Cutlery has net sales of $1,200,000, net income of $88,000, average current assets of $48,000, average fixed assets of $186,000, and average total assets of $234,000. Cersei's return on assets is: (Round your final answer to the nearest percentage.)

Accepted Answer

A) 38%. 
B) 7%. 
C) 47%. 
D) 183%. 
A) 38%. 
B) 7%. 
C) 47%. 
D) 183%.

Question 4

A common-size comparative statement shows:

Accepted Answer

A) dollars and percents. 
B) dollars only. 
C) percents only. 
D) dollar increases and decreases. 
A) dollars and percents. 
B) dollars only. 
C) percents only. 
D) dollar increases and decreases.

Question 5

The three ways to analyze financial statements are by using horizontal, vertical and ratio analysis.

Accepted Answer

A) True 
 B)False

Question 6

The most recent period in a horizontal analysis is called the base period.

Accepted Answer

A) True 
 B)False

Question 7

Max Corp. reported the following for 2016:  
What is the dividend payout ratio for Max Corp? (Round your final answer to two decimal places, X.XX%.)

Accepted Answer

A) 36.59% 
B) 5.07% 
C) 63.41% 
D) 38.50% 
A) 36.59% 
B) 5.07% 
C) 63.41% 
D) 38.50%

Question 8

The Betta Group reported the following for 2016:  
What are the dividends per share for Betta? (Round your final answer to two decimal places.)

Accepted Answer

A) $4.09/share 
B) $31.75/share 
C) $0.45/share 
D) $3.65/share 
A) $4.09/share 
B) $31.75/share 
C) $0.45/share 
D) $3.65/share

Question 9

Winter Coffee's cash reported on the comparative Balance Sheet was $236,000 in 2015 and $246,000 in 2016. The percentage change in cash from 2015 to 2016 was: (Round your final answer to two decimal places, X.XX%.)

Accepted Answer

A) +4.07%. 
B) +4.24%. 
C)  -4.24%. 
D)  -4.07%. 
A) +4.07%. 
B) +4.24%. 
C)  -4.24%. 
D)  -4.07%.

Question 10

Raven Industries reported Net Sales of $296,000, Cost of Goods Sold of $196,600, Operating Expenses of $57,900, and Income Tax Expense of 15,300. Raven Industries' gross profit margin percentage was: (Round your final answer to two decimal places, X.XX%.)

Accepted Answer

A) 33.58%. 
B) 8.85%. 
C) 66.42%. 
D) 14.02%. 
A) 33.58%. 
B) 8.85%. 
C) 66.42%. 
D) 14.02%.

Question 11

If Net Sales at Good Dog Bakery increased from $36,000 to $63,000 and its cost of goods sold increased from $20,000 to $38,000, the vertical analysis based on net sales would show the following percentages for cost of goods sold: (Round your final answer to the nearest percentage.)

Accepted Answer

A) 36% and 20%. 
B) 20% and 36%. 
C) 56% and 60%. 
D) 60% and 36%. 
A) 36% and 20%. 
B) 20% and 36%. 
C) 56% and 60%. 
D) 60% and 36%.

Question 12

Why would a slow inventory turnover rate be a red flag in a financial statement analysis?

Accepted Answer

A) The company may have obsolete inventory. 
B) The company may have bad salespeople. 
C) The company may be overstating inventory. 
D) Both A and C are reasons why it would be a red flag. 
A) The company may have obsolete inventory. 
B) The company may have bad salespeople. 
C) The company may be overstating inventory. 
D) Both A and C are reasons why it would be a red flag.

Question 13

Evaluating whether a business is creating value is known as:

Accepted Answer

A) benchmarking. 
B) financial analysis. 
C) comparative analysis. 
D) valuation. 
A) benchmarking. 
B) financial analysis. 
C) comparative analysis. 
D) valuation.

Question 14

Ironworks, Inc. has cost of goods sold for the years 2016, 2015 and 2014 respectively of $28,400, $26,400 and $25,100. If 2014 is the base year, the trend percentage for 2016 is: (Round your final answer to two decimal places, X.XX%.)

Accepted Answer

A) 113.15%. 
B) 13.15%. 
C) 105.18%. 
D) 5.18%. 
A) 113.15%. 
B) 13.15%. 
C) 105.18%. 
D) 5.18%.

Question 15

On the Income Statement, the results of discontinued operations are reported:

Accepted Answer

A) as part of other income (expense). 
B) as part of operating income. 
C) net of income tax or net of income tax savings. 
D) before the operating income section. 
A) as part of other income (expense). 
B) as part of operating income. 
C) net of income tax or net of income tax savings. 
D) before the operating income section.

Question 16

In computing trend percentages, the most recent year amounts become the base and are always set to 100%.

Accepted Answer

A) True 
 B)False

Question 17

The lower the interest coverage ratio, the more likely:

Accepted Answer

A) a default in payment will occur. 
B) a business needs to borrow money. 
C) a business will suffer a loss. 
D) interest payments can be made. 
A) a default in payment will occur. 
B) a business needs to borrow money. 
C) a business will suffer a loss. 
D) interest payments can be made.

Question 18

If a company's net cash flow from operations is consistently higher than net income, this could be a red flag that the company is in trouble.

Accepted Answer

A) True 
 B)False

Question 19

Blue Gem Supply has an average days' in receivable of 44 days. Blue's Accounts Receivable turnover is closest to: (Assume a 365-day year in your calculations. Round your final answer to the closest day.)

Accepted Answer

A) 44. 
B) 8. 
C) 11. 
D) 15. 
A) 44. 
B) 8. 
C) 11. 
D) 15.

Question 20

The fixed asset turnover ratio measures a company's ability to generate sales using all of its assets.

Accepted Answer

A) True 
 B)False

A high dividend yield means that stockholders are receiving a large return in the form of dividends.

The purpose of financial analysis is to see how revenue changes over time.

Cersei's Cutlery has net sales of $1,200,000, net income of $88,000, average current assets of $48,000, average fixed assets of $186,000, and average total assets of $234,000. Cersei's return on assets is: (Round your final answer to the nearest percentage.)

A common-size comparative statement shows:

The three ways to analyze financial statements are by using horizontal, vertical and ratio analysis.

The most recent period in a horizontal analysis is called the base period.

Max Corp. reported the following for 2016: What is the dividend payout ratio for Max Corp? (Round your final answer to two decimal places, X.XX%.)

The Betta Group reported the following for 2016: What are the dividends per share for Betta? (Round your final answer to two decimal places.)

Winter Coffee's cash reported on the comparative Balance Sheet was $236,000 in 2015 and $246,000 in 2016. The percentage change in cash from 2015 to 2016 was: (Round your final answer to two decimal places, X.XX%.)

Raven Industries reported Net Sales of $296,000, Cost of Goods Sold of $196,600, Operating Expenses of $57,900, and Income Tax Expense of 15,300. Raven Industries' gross profit margin percentage was: (Round your final answer to two decimal places, X.XX%.)

If Net Sales at Good Dog Bakery increased from $36,000 to $63,000 and its cost of goods sold increased from $20,000 to $38,000, the vertical analysis based on net sales would show the following percentages for cost of goods sold: (Round your final answer to the nearest percentage.)

Why would a slow inventory turnover rate be a red flag in a financial statement analysis?

Evaluating whether a business is creating value is known as:

Ironworks, Inc. has cost of goods sold for the years 2016, 2015 and 2014 respectively of $28,400, $26,400 and $25,100. If 2014 is the base year, the trend percentage for 2016 is: (Round your final answer to two decimal places, X.XX%.)

On the Income Statement, the results of discontinued operations are reported:

In computing trend percentages, the most recent year amounts become the base and are always set to 100%.

The lower the interest coverage ratio, the more likely:

If a company's net cash flow from operations is consistently higher than net income, this could be a red flag that the company is in trouble.

Blue Gem Supply has an average days' in receivable of 44 days. Blue's Accounts Receivable turnover is closest to: (Assume a 365-day year in your calculations. Round your final answer to the closest day.)

The fixed asset turnover ratio measures a company's ability to generate sales using all of its assets.

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

A high dividend yield means that stockholders are receiving a large return in the form of dividends.

The purpose of financial analysis is to see how revenue changes over time.

Cersei's Cutlery has net sales of $1,200,000, net income of $88,000, average current assets of $48,000, average fixed assets of $186,000, and average total assets of $234,000. Cersei's return on assets is: (Round your final answer to the nearest percentage.)

A common-size comparative statement shows:

The three ways to analyze financial statements are by using horizontal, vertical and ratio analysis.

The most recent period in a horizontal analysis is called the base period.

Max Corp. reported the following for 2016: What is the dividend payout ratio for Max Corp? (Round your final answer to two decimal places, X.XX%.)

The Betta Group reported the following for 2016: What are the dividends per share for Betta? (Round your final answer to two decimal places.)

Winter Coffee's cash reported on the comparative Balance Sheet was $236,000 in 2015 and $246,000 in 2016. The percentage change in cash from 2015 to 2016 was: (Round your final answer to two decimal places, X.XX%.)

Raven Industries reported Net Sales of $296,000, Cost of Goods Sold of $196,600, Operating Expenses of $57,900, and Income Tax Expense of 15,300. Raven Industries' gross profit margin percentage was: (Round your final answer to two decimal places, X.XX%.)

If Net Sales at Good Dog Bakery increased from $36,000 to $63,000 and its cost of goods sold increased from $20,000 to $38,000, the vertical analysis based on net sales would show the following percentages for cost of goods sold: (Round your final answer to the nearest percentage.)

Why would a slow inventory turnover rate be a red flag in a financial statement analysis?

Evaluating whether a business is creating value is known as:

Ironworks, Inc. has cost of goods sold for the years 2016, 2015 and 2014 respectively of $28,400, $26,400 and $25,100. If 2014 is the base year, the trend percentage for 2016 is: (Round your final answer to two decimal places, X.XX%.)

On the Income Statement, the results of discontinued operations are reported:

In computing trend percentages, the most recent year amounts become the base and are always set to 100%.

The lower the interest coverage ratio, the more likely:

If a company's net cash flow from operations is consistently higher than net income, this could be a red flag that the company is in trouble.

Blue Gem Supply has an average days' in receivable of 44 days. Blue's Accounts Receivable turnover is closest to: (Assume a 365-day year in your calculations. Round your final answer to the closest day.)

The fixed asset turnover ratio measures a company's ability to generate sales using all of its assets.

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