Question 1

The financial statements of Midwest Tours are given below.   Refer to the financial statements of Midwest Tours.The firm's current ratio for 2009 is

Accepted Answer

A) 1.82. 
B) 1.03. 
C) 1.30. 
D) 1.65. 
E) None of the options 
A) 1.82. 
B) 1.03. 
C) 1.30. 
D) 1.65. 
E) None of the options

Question 2

Publicly traded firms must prepare audited financial statements according to generally accepted accounting principles (GAAP).How do comparability problems arise

Accepted Answer

Many accounts may be valued by more than

Question 3

In periods of inflation, accounting depreciation is __________ relative to replacement cost and real economic income is________.

Accepted Answer

A) overstated; overstated 
B) overstated; understated 
C) understated; overstated 
D) understated; understated 
E) correctly; correctly 
A) overstated; overstated 
B) overstated; understated 
C) understated; overstated 
D) understated; understated 
E) correctly; correctly

Question 4

The financial statements of Snapit Company are given below.   Refer to the financial statements of Snapit Company.The firm's return on equity ratio for 2009 is

Accepted Answer

A) 0.1235. 
B) 0.0296. 
C) 0.2960. 
D) 2.2960. 
A) 0.1235. 
B) 0.0296. 
C) 0.2960. 
D) 2.2960.

Question 5

The financial statements of Midwest Tours are given below.   Refer to the financial statements of Midwest Tours.The firm's inventory turnover ratio for 2009 is

Accepted Answer

A) 2.86. 
B) 1.23. 
C) 5.96. 
D) 4.42. 
E) 4.86. 
A) 2.86. 
B) 1.23. 
C) 5.96. 
D) 4.42. 
E) 4.86.

Question 6

The financial statements of Snapit Company are given below.   Refer to the financial statements of Snapit Company.The firm's times interest earned ratio for 2009 is

Accepted Answer

A) 2.26. 
B) 3.16. 
C) 3.84. 
D) 3.31. 
E) None of the options 
A) 2.26. 
B) 3.16. 
C) 3.84. 
D) 3.31. 
E) None of the options

Question 7

__________ is a summary of the profitability of the firm over a period of time such as a year.

Accepted Answer

A) The balance sheet 
B) The income statement 
C) That statement of cash flows 
D) The audit report 
E) None of the options 
A) The balance sheet 
B) The income statement 
C) That statement of cash flows 
D) The audit report 
E) None of the options

Question 8

Over a period of 30 years or so, in managing investment funds, Benjamin Graham used the approach of investing in the stocks of companies where the stocks were trading at less than their working capital value.The average return from using this strategy was approximately

Accepted Answer

A) 5% 
B) 10%. 
C) 15%. 
D) 20%. 
E) None of the options 
A) 5% 
B) 10%. 
C) 15%. 
D) 20%. 
E) None of the options

Question 9

Which of the following are issues when dealing with the financial statements of international firms
I. Many countries allow firms to set aside larger contingency reserves than the amounts allowed for U.S.firms.
II. Many firms outside the U.S.use accelerated depreciation methods for reporting purposes, whereas most U.S.firms use straight-line depreciation for reporting purposes.
III. Intangibles such as goodwill may be amortized over different periods or may be expensed rather than capitalized.
IV. There is no way to reconcile the financial statements of non-U.S.firms to GAAP.

Accepted Answer

A) I and II 
B) II and IV 
C) I, II, and III 
D) I, III, and IV 
E) I, II, III, and IV 
A) I and II 
B) II and IV 
C) I, II, and III 
D) I, III, and IV 
E) I, II, III, and IV

Question 10

A firm has a lower quick (or acid test) ratio than the industry average, which implies

Accepted Answer

A) the firm has a lower P/E ratio than other firms in the industry. 
B) the firm is less likely to avoid insolvency in the short run than other firms in the industry. 
C) the firm may be more profitable than other firms in the industry. 
D) the firm has a lower P/E ratio than other firms in the industry and the firm is less likely to avoid insolvency in the short run than other firms in the industry. 
E) the firm is less likely to avoid insolvency in the short run than other firms in the industry and the firm may be more profitable than other firms in the industry. 
A) the firm has a lower P/E ratio than other firms in the industry. 
B) the firm is less likely to avoid insolvency in the short run than other firms in the industry. 
C) the firm may be more profitable than other firms in the industry. 
D) the firm has a lower P/E ratio than other firms in the industry and the firm is less likely to avoid insolvency in the short run than other firms in the industry. 
E) the firm is less likely to avoid insolvency in the short run than other firms in the industry and the firm may be more profitable than other firms in the industry.

Question 11

__________ is a report of the cash flow generated by the firm's operations, investments and financial activities.

Accepted Answer

A) The balance sheet 
B) The income statement 
C) The statement of cash flows 
D) The auditor's statement of financial condition 
E) None of the options 
A) The balance sheet 
B) The income statement 
C) The statement of cash flows 
D) The auditor's statement of financial condition 
E) None of the options

The financial statements of Midwest Tours are given below. Refer to the financial statements of Midwest Tours.The firm's current ratio for 2009 is

Publicly traded firms must prepare audited financial statements according to generally accepted accounting principles (GAAP).How do comparability problems arise

In periods of inflation, accounting depreciation is __ relative to replacement cost and real economic income is.

The financial statements of Snapit Company are given below. Refer to the financial statements of Snapit Company.The firm's return on equity ratio for 2009 is

The financial statements of Midwest Tours are given below. Refer to the financial statements of Midwest Tours.The firm's inventory turnover ratio for 2009 is

The financial statements of Snapit Company are given below. Refer to the financial statements of Snapit Company.The firm's times interest earned ratio for 2009 is

__________ is a summary of the profitability of the firm over a period of time such as a year.

Over a period of 30 years or so, in managing investment funds, Benjamin Graham used the approach of investing in the stocks of companies where the stocks were trading at less than their working capital value.The average return from using this strategy was approximately

A firm has a lower quick (or acid test) ratio than the industry average, which implies

__________ is a report of the cash flow generated by the firm's operations, investments and financial activities.

The Investment Environment

Asset Classes and Financial Instruments

How Securities Are Traded

Mutual Funds and Other Investment Companies

Risk, Return, and the Historical Record

Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation Models

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, Swaps, and Risk Management

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the Cfa Institute

Filters

Exam 19: Financial Statement Analysis

The financial statements of Midwest Tours are given below. Refer to the financial statements of Midwest Tours.The firm's current ratio for 2009 is

Publicly traded firms must prepare audited financial statements according to generally accepted accounting principles (GAAP).How do comparability problems arise

In periods of inflation, accounting depreciation is __________ relative to replacement cost and real economic income is________.

The financial statements of Snapit Company are given below. Refer to the financial statements of Snapit Company.The firm's return on equity ratio for 2009 is

The financial statements of Midwest Tours are given below. Refer to the financial statements of Midwest Tours.The firm's inventory turnover ratio for 2009 is

The financial statements of Snapit Company are given below. Refer to the financial statements of Snapit Company.The firm's times interest earned ratio for 2009 is

__________ is a summary of the profitability of the firm over a period of time such as a year.

Over a period of 30 years or so, in managing investment funds, Benjamin Graham used the approach of investing in the stocks of companies where the stocks were trading at less than their working capital value.The average return from using this strategy was approximately

A firm has a lower quick (or acid test) ratio than the industry average, which implies

__________ is a report of the cash flow generated by the firm's operations, investments and financial activities.

The Investment Environment

Asset Classes and Financial Instruments

How Securities Are Traded

Mutual Funds and Other Investment Companies

Risk, Return, and the Historical Record

Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation Models

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, Swaps, and Risk Management

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the Cfa Institute

Filters

In periods of inflation, accounting depreciation is __ relative to replacement cost and real economic income is.