Question 1

Trend percentages are not a form of vertical analysis.

Accepted Answer

A) True 
 B)False

Question 2

The following information relates to Woolf Unlimited for the past two years.   What is days' sales in receivables for the current year?

Accepted Answer

A) 56.78 days 
B) 69.20 days 
C) 43.08 days 
D) 10.00 days 
A) 56.78 days 
B) 69.20 days 
C) 43.08 days 
D) 10.00 days

Question 3

Which of the following types of analysis include trend percentage analysis?

Accepted Answer

A) Vertical 
B) Horizontal 
C) Benchmarking 
D) Profitability 
A) Vertical 
B) Horizontal 
C) Benchmarking 
D) Profitability

Question 4

Common size statements allow the comparison of two or more companies with different amounts of net sales and net assets.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) The debt ratio is 35.32%. 
B) Long-term liabilities increased by 4.47%. 
C) The current ratio is 1.24. 
D) Long-term liabilities decreased by $(1,400). 
A) The debt ratio is 35.32%. 
B) Long-term liabilities increased by 4.47%. 
C) The current ratio is 1.24. 
D) Long-term liabilities decreased by $(1,400).

Question 6

The formula to compute accounts receivable turnover is

Accepted Answer

A) net credit sales/average net accounts receivable. 
B) net credit sales/average inventory. 
C) cost of goods sold/average inventory. 
D) average net accounts receivable/one day's sales. 
A) net credit sales/average net accounts receivable. 
B) net credit sales/average inventory. 
C) cost of goods sold/average inventory. 
D) average net accounts receivable/one day's sales.

Question 7

Presented are the income statements of Bostick and Stemple Publications companies for the current year:   Which company has the better relationship between gross profit and net sales revenue?

Accepted Answer

A) Impossible to determine 
B) Both have the same relationship 
C) Bostick 
D) Stemple 
A) Impossible to determine 
B) Both have the same relationship 
C) Bostick 
D) Stemple

Question 8

Ferrero Company reported the following information for the current year:   With respect to current year net sales revenue, what would a vertical analysis report?

Accepted Answer

A) COGS would be 15.00% of net sales revenue 
B) A dividend yield of $8.20 
C) A decrease of 10% in net sales revenue 
D) Net sales revenue would be the base amount 
A) COGS would be 15.00% of net sales revenue 
B) A dividend yield of $8.20 
C) A decrease of 10% in net sales revenue 
D) Net sales revenue would be the base amount

Question 9

The Bedford 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 $30,000 of the current year's current assets.
Average inventory for the current year is $36,250.
Average net accounts receivable for the current year is $45,000.
There are 35,000 shares of common stock outstanding.
Total dividends paid during the current year were $17,000.
The market price per share of common stock is $20.
What is the accounts receivable turnover for the current year?

Accepted Answer

A) 27.11 times 
B) 0.04 times 
C) 20 times 
D) 13.4631 times 
A) 27.11 times 
B) 0.04 times 
C) 20 times 
D) 13.4631 times

Question 10

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 current ratio for the current year?

Accepted Answer

A) 1.27 
B) 2.55 
C) 0.79 
D) 0.35 
A) 1.27 
B) 2.55 
C) 0.79 
D) 0.35

Question 11

The following information relates to Truman Unlimited for the past two years.   The book value per share of common stock for the current year is

Accepted Answer

A) $52.77. 
B) $79.50. 
C) $13.50. 
D) $96.00. 
A) $52.77. 
B) $79.50. 
C) $13.50. 
D) $96.00.

Question 12

The Nichols Corporation data for the current year:   What would a horizontal analysis report with respect to current assets?

Accepted Answer

A) Inventory turnover of 9.17 times 
B) Current ratio of 1.06 
C) A 26.00% increase in current assets 
D) Current assets as 40.60% of total assets 
A) Inventory turnover of 9.17 times 
B) Current ratio of 1.06 
C) A 26.00% increase in current assets 
D) Current assets as 40.60% of total assets

Question 13

Which type of analysis includes the computation of the percentage change in total assets between two balance sheet dates?

Accepted Answer

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

Question 14

Which of the following is considered a strong current ratio?

Accepted Answer

A) 0.5 
B) 1.0 
C) -1.0 
D) 2.0 
A) 0.5 
B) 1.0 
C) -1.0 
D) 2.0

Question 15

The formula to compute the debt ratio is

Accepted Answer

A) interest expense/income from operations. 
B) total liabilities/total assets. 
C) income from operations/interest expense. 
D) total assets/total liabilities. 
A) interest expense/income from operations. 
B) total liabilities/total assets. 
C) income from operations/interest expense. 
D) total assets/total liabilities.

Question 16

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 rate of return on common stockholder's equity for the current year?

Accepted Answer

A) 32.00% 
B) 42.11% 
C) 6.00% 
D) 30.77% 
A) 32.00% 
B) 42.11% 
C) 6.00% 
D) 30.77%

Question 17

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

Accepted Answer

A) Current liabilities saw a 30% increase from the prior year to the current year. 
B) Current liabilities are 11.77% of total capital. 
C) The current ratio is 1.06. 
D) Current liabilities saw a 76.92% increase from the prior year to the current year. 
A) Current liabilities saw a 30% increase from the prior year to the current year. 
B) Current liabilities are 11.77% of total capital. 
C) The current ratio is 1.06. 
D) Current liabilities saw a 76.92% increase from the prior year to the current year.

Question 18

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

Accepted Answer

A) Inventory turnover of 9.34 times 
B) Current ratio of 0.92 
C) Current assets as 40.79% of total assets 
D) A 27.00% increase in current assets 
A) Inventory turnover of 9.34 times 
B) Current ratio of 0.92 
C) Current assets as 40.79% of total assets 
D) A 27.00% increase in current assets

Question 19

The Bedford 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 $30,000 of the current year's current assets.
Average inventory for the current year is $36,250.
Average net accounts receivable for the current year is $45,000.
There are 35,000 shares of common stock outstanding.
Total dividends paid during the current year were $17,000.
The market price per share of common stock is $20.
What is the times-interest-earned ratio for the current year?

Accepted Answer

A) 1.46 times 
B) 1.00 times 
C) 5.12 times 
D) 4.12 times 
A) 1.46 times 
B) 1.00 times 
C) 5.12 times 
D) 4.12 times

Question 20

The following information relates to Woolf Unlimited for the past two years.   What is the times-interest-earned ratio for the current year?

Accepted Answer

A) 3.71 times 
B) 13.00 times 
C) 2.30 times 
D) 1.75 times 
A) 3.71 times 
B) 13.00 times 
C) 2.30 times 
D) 1.75 times

Trend percentages are not a form of vertical analysis.

The following information relates to Woolf Unlimited for the past two years. What is days' sales in receivables for the current year?

Which of the following types of analysis include trend percentage analysis?

Common size statements allow the comparison of two or more companies with different amounts of net sales and net assets.

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

The formula to compute accounts receivable turnover is

Presented are the income statements of Bostick and Stemple Publications companies for the current year: Which company has the better relationship between gross profit and net sales revenue?

Ferrero Company reported the following information for the current year: With respect to current year net sales revenue, what would a vertical analysis report?

The following information relates to Truman Unlimited for the past two years. The book value per share of common stock for the current year is

The Nichols Corporation data for the current year: What would a horizontal analysis report with respect to current assets?

Which type of analysis includes the computation of the percentage change in total assets between two balance sheet dates?

Which of the following is considered a strong current ratio?

The formula to compute the debt ratio is

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

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

The following information relates to Woolf Unlimited for the past two years. What is the times-interest-earned ratio for the current year?

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

Trend percentages are not a form of vertical analysis.

The following information relates to Woolf Unlimited for the past two years. What is days' sales in receivables for the current year?

Which of the following types of analysis include trend percentage analysis?

Common size statements allow the comparison of two or more companies with different amounts of net sales and net assets.

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

The formula to compute accounts receivable turnover is

Presented are the income statements of Bostick and Stemple Publications companies for the current year: Which company has the better relationship between gross profit and net sales revenue?

Ferrero Company reported the following information for the current year: With respect to current year net sales revenue, what would a vertical analysis report?

The following information relates to Truman Unlimited for the past two years. The book value per share of common stock for the current year is

The Nichols Corporation data for the current year: What would a horizontal analysis report with respect to current assets?

Which type of analysis includes the computation of the percentage change in total assets between two balance sheet dates?

Which of the following is considered a strong current ratio?

The formula to compute the debt ratio is

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

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

The following information relates to Woolf Unlimited for the past two years. What is the times-interest-earned ratio for the current year?

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