Question 1

The Nichols Corporation data for the current year:   What would a horizontal analysis report with respect to long-term liabilities?

Accepted Answer

A) Long-term liabilities increased by $6,000. 
B) Long-term liabilities decreased by 5.92%. 
C) Long-term liabilities increased by 6.21%. 
D) Long-term liabilities decreased by $1,500. 
A) Long-term liabilities increased by $6,000. 
B) Long-term liabilities decreased by 5.92%. 
C) Long-term liabilities increased by 6.21%. 
D) Long-term liabilities decreased by $1,500. A

Question 2

Vertical analysis is the analysis of a financial statement that reveals the relationship of each statement item to a specified base.

Accepted Answer

A) True 
 B)False  True

Question 3

Rate of return on net sales is a measure of a company's profitability.

Accepted Answer

A) True 
 B)False  True

Question 4

Taylor Company reported the following information for the current year:   What would a vertical analysis report with respect to current year income tax expense?

Accepted Answer

A) A decrease of $24,768 
B) A decrease of 144.80% from prior to current year 
C) Income tax expense is 2.00% of net sales revenue 
D) A decrease of $4,344 
A) A decrease of $24,768 
B) A decrease of 144.80% from prior to current year 
C) Income tax expense is 2.00% of net sales revenue 
D) A decrease of $4,344

Question 5

Earning more income on borrowed money than on the related interest expense is an example of

Accepted Answer

A) trading on assets. 
B) trading on equity. 
C) trading on liabilities. 
D) all of the above. 
A) trading on assets. 
B) trading on equity. 
C) trading on liabilities. 
D) all of the above.

Question 6

Selected information about The Staccato Company for the current year and prior year is given below.   The current year's net income percentage (as would be found on a vertical analysis of the income statement for the current year)is

Accepted Answer

A) 11.00%. 
B) 11.98%. 
C) 32.74%. 
D) 132.74%. 
A) 11.00%. 
B) 11.98%. 
C) 32.74%. 
D) 132.74%.

Question 7

The common size statement percentages are different from those that appear in horizontal analysis.

Accepted Answer

A) True 
 B)False

Question 8

The comparison of operating expenses in Year 1 and Year 2 would be included in which of the following types of analysis?

Accepted Answer

A) Profitability 
B) Capital 
C) Horizontal 
D) Trend 
A) Profitability 
B) Capital 
C) Horizontal 
D) Trend

Question 9

The Hummel Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year.   Inventory and prepaid expenses account for $28,000 of the current year's current assets.
Average inventory for the current year is $12,000.
Average net accounts receivable for the current year is $32,000.
There are 40,000 shares of common stock outstanding.
Total dividends paid during the current year were $60,000.
The market price per share of common stock is $25.
What is the company's acid-test ratio for the current year?

Accepted Answer

A) 0.35 
B) 1.27 
C) 5.38 
D) 0.77 
A) 0.35 
B) 1.27 
C) 5.38 
D) 0.77

Question 10

To follow is selected information about The Boston Company for the current year and prior year.   What is the current year's income tax percentage (as would be found on a vertical analysis of the income statement for the current year)?

Accepted Answer

A) 4.00% 
B) 13.68% 
C) 113.68% 
D) 4.36% 
A) 4.00% 
B) 13.68% 
C) 113.68% 
D) 4.36%

Question 11

The Hummel Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year.   Inventory and prepaid expenses account for $28,000 of the current year's current assets.
Average inventory for the current year is $12,000.
Average net accounts receivable for the current year is $32,000.
There are 40,000 shares of common stock outstanding.
Total dividends paid during the current year were $60,000.
The market price per share of common stock is $25.
What is the company's inventory turnover for the current year?

Accepted Answer

A) 15.75 times 
B) 42.00 times 
C) 25.00 times 
D) 24.67 times 
A) 15.75 times 
B) 42.00 times 
C) 25.00 times 
D) 24.67 times

Question 12

Working capital is current assets minus current liabilities.

Accepted Answer

A) True 
 B)False

Question 13

The formula for computing the dividend yield is

Accepted Answer

A) annual dividend per share of common stock/market price per share of common stock. 
B) market price per share of common stock/earnings per share. 
C) total stockholders' equity/number of shares of outstanding common stock. 
D) (net income - preferred dividends)/number of shares of outstanding common stock. 
A) annual dividend per share of common stock/market price per share of common stock. 
B) market price per share of common stock/earnings per share. 
C) total stockholders' equity/number of shares of outstanding common stock. 
D) (net income - preferred dividends)/number of shares of outstanding common stock.

Question 14

A company reported the following amounts of net income:   Which of the following is the percentage change from Year 1 to Year 2?

Accepted Answer

A) 150.00% 
B) 110.00% 
C) 40.00% 
D) 50.00% 
A) 150.00% 
B) 110.00% 
C) 40.00% 
D) 50.00%

Question 15

The McCumber Corporation data for the current year:   With respect to current liabilities, what would a horizontal analysis report?

Accepted Answer

A) The current ratio is 0.92. 
B) Current liabilities are 13.35% of total capital. 
C) Current liabilities saw a 50% increase from the prior year to the current year. 
D) Current liabilities saw a 66.67% increase from the prior year to the current year. 
A) The current ratio is 0.92. 
B) Current liabilities are 13.35% of total capital. 
C) Current liabilities saw a 50% increase from the prior year to the current year. 
D) Current liabilities saw a 66.67% increase from the prior year to the current year.

Question 16

The following information relates to Tappan Corporation.
   Required:
a. What is the book value per share of common stock for the current year?
b. What is the price-earnings ratio for the current year?
c. What is the rate of return on total assets for the current year?
d. What is the times-interest-earned ratio for the current year?

Accepted Answer

Part a.
 @#IMG-DLM&

Question 17

The times-interest-earned ratio is a measure of ability to cover debt.

Accepted Answer

A) True 
 B)False

Question 18

Benchmarking is the comparison of year-to-year results of the company.

Accepted Answer

A) True 
 B)False

Question 19

The ability of a company to collect receivables is measured by which ratio?

Accepted Answer

A) Inventory turnover ratio 
B) Day's sales in receivables 
C) Current ratio 
D) Acid-test ratio 
A) Inventory turnover ratio 
B) Day's sales in receivables 
C) Current ratio 
D) Acid-test ratio

Question 20

The following information relates to Truman Unlimited for the past two years.   The price-earnings ratio for the current year is

Accepted Answer

A) 13.33. 
B) 1.97. 
C) 9.60. 
D) 13.50. 
A) 13.33. 
B) 1.97. 
C) 9.60. 
D) 13.50.

The Nichols Corporation data for the current year: What would a horizontal analysis report with respect to long-term liabilities?

Vertical analysis is the analysis of a financial statement that reveals the relationship of each statement item to a specified base.

Rate of return on net sales is a measure of a company's profitability.

Taylor Company reported the following information for the current year: What would a vertical analysis report with respect to current year income tax expense?

Earning more income on borrowed money than on the related interest expense is an example of

Selected information about The Staccato Company for the current year and prior year is given below. The current year's net income percentage (as would be found on a vertical analysis of the income statement for the current year)is

The common size statement percentages are different from those that appear in horizontal analysis.

The comparison of operating expenses in Year 1 and Year 2 would be included in which of the following types of analysis?

To follow is selected information about The Boston Company for the current year and prior year. What is the current year's income tax percentage (as would be found on a vertical analysis of the income statement for the current year)?

Working capital is current assets minus current liabilities.

The formula for computing the dividend yield is

A company reported the following amounts of net income: Which of the following is the percentage change from Year 1 to Year 2?

The McCumber Corporation data for the current year: With respect to current liabilities, what would a horizontal analysis report?

The times-interest-earned ratio is a measure of ability to cover debt.

Benchmarking is the comparison of year-to-year results of the company.

The ability of a company to collect receivables is measured by which ratio?

The following information relates to Truman Unlimited for the past two years. The price-earnings ratio for the current year is

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Sustainability

Filters

Exam 14: Financial Statement Analysis

The Nichols Corporation data for the current year: What would a horizontal analysis report with respect to long-term liabilities?

Vertical analysis is the analysis of a financial statement that reveals the relationship of each statement item to a specified base.

Rate of return on net sales is a measure of a company's profitability.

Taylor Company reported the following information for the current year: What would a vertical analysis report with respect to current year income tax expense?

Earning more income on borrowed money than on the related interest expense is an example of

Selected information about The Staccato Company for the current year and prior year is given below. The current year's net income percentage (as would be found on a vertical analysis of the income statement for the current year)is

The common size statement percentages are different from those that appear in horizontal analysis.

The comparison of operating expenses in Year 1 and Year 2 would be included in which of the following types of analysis?

To follow is selected information about The Boston Company for the current year and prior year. What is the current year's income tax percentage (as would be found on a vertical analysis of the income statement for the current year)?

Working capital is current assets minus current liabilities.

The formula for computing the dividend yield is

A company reported the following amounts of net income: Which of the following is the percentage change from Year 1 to Year 2?

The McCumber Corporation data for the current year: With respect to current liabilities, what would a horizontal analysis report?

The times-interest-earned ratio is a measure of ability to cover debt.

Benchmarking is the comparison of year-to-year results of the company.

The ability of a company to collect receivables is measured by which ratio?

The following information relates to Truman Unlimited for the past two years. The price-earnings ratio for the current year is

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Sustainability

Filters