Question 1

The return on equity ratio under the DuPont framework is computed as

Accepted Answer

A)  Net income/Revenue 
B)  Revenue/Assets 
C)  Assets/Equity 
D)  Net income/Equity 
A)  Net income/Revenue 
B)  Revenue/Assets 
C)  Assets/Equity 
D)  Net income/Equity

Question 2

The following data came from the financial statements of Petrini Company:
  
-Refer to Exhibit 14-6. Given the information above, compute the assets-to-equity ratio (rounded to two decimal places) for Petrini Company.

Accepted Answer

A)  0.46 
B)  0.54 
C)  0.86 
D)  1.86 
A)  0.46 
B)  0.54 
C)  0.86 
D)  1.86

Question 3

The balance sheet at the end of the first year of operations indicates the following:
  
-Refer to Exhibit 14-2. What is the debt ratio for 2012 (rounded to one decimal places)?

Accepted Answer

A)  37.9% 
B)  40.0% 
C)  22.1% 
D)  41.7% 
A)  37.9% 
B)  40.0% 
C)  22.1% 
D)  41.7%

Question 4

Which of the following ratios is decomposed using the DuPont framework?

Accepted Answer

A)  Return on equity 
B)  Asset turnover 
C)  Assets-to-equity ratio 
D)  Return on sales 
A)  Return on equity 
B)  Asset turnover 
C)  Assets-to-equity ratio 
D)  Return on sales

Question 5

External users of financial statements use financial statement analysis for

Accepted Answer

A)  Operating, investing, and financing decisions 
B)  Investing decisions 
C)  Operating and financing decisions 
D)  Financing decisions 
A)  Operating, investing, and financing decisions 
B)  Investing decisions 
C)  Operating and financing decisions 
D)  Financing decisions

Question 6

The financial statements for Kobe Corporation revealed that sales revenue was $1,581,000 and that the following were the ending account balances:
  
Compute the following (round all numbers to one decimal place):

Accepted Answer

Compute the followin

Question 7

The income statement and balance sheet for the W. Gretsky Company for the year ended December 31, 2012, is presented below:
  
  Using the DuPont framework, compute (round to two decimal places):

Accepted Answer

@#IMG-DLM& Using the DuPont fr

Question 8

Which of the following ratios represents an indication of investors' expectations concerning a firm's growth potential?

Accepted Answer

A)  Earnings per share 
B)  Return on equity 
C)  Price-earnings ratio 
D)  Asset turnover 
A)  Earnings per share 
B)  Return on equity 
C)  Price-earnings ratio 
D)  Asset turnover

Question 9

Amherst, Inc.'s financial statements contained the following information:
  
Calculate the following:

Accepted Answer

Calculate

Question 10

The financial statements of Girard Company reflect the following data:
  
Using the above information, compute the following ratios (round to two decimal places):

Accepted Answer

Using the above info

Question 11

Which of the following ratios is used to measure a firm's profitability?

Accepted Answer

A)  Liabilities ¸ Equity 
B)  Sales ¸ Assets 
C)  Assets ¸ Equity 
D)  Net income ¸ Sales 
A)  Liabilities ¸ Equity 
B)  Sales ¸ Assets 
C)  Assets ¸ Equity 
D)  Net income ¸ Sales

Question 12

Which ratio represents how many times during the year a company is collecting its receivables?

Accepted Answer

A)  Average collection period for accounts receivable 
B)  Accounts receivable turnover 
C)  Inventory turnover 
D)  Fixed asset turnover 
A)  Average collection period for accounts receivable 
B)  Accounts receivable turnover 
C)  Inventory turnover 
D)  Fixed asset turnover

Question 13

Selected financial statement numbers for Frederick Company are given below:
 
- Refer to Exhibit 14-5. Using the information above, calculate Frederick's average collection period (round to two decimal places).

Accepted Answer

A)  99.46 days 
B)  27.26 days 
C)  42.25 days 
D)  5.45 days 
A)  99.46 days 
B)  27.26 days 
C)  42.25 days 
D)  5.45 days

Question 14

Write out the formula for each of the following ratios:

Accepted Answer

The answer of Write out the formula for each of...

Question 15

Which of the following ratios is NOT an efficiency ratio?

Accepted Answer

A)  Fixed asset turnover 
B)  Inventory turnover 
C)  Debt-to-equity 
D)  Days' sales in inventory 
A)  Fixed asset turnover 
B)  Inventory turnover 
C)  Debt-to-equity 
D)  Days' sales in inventory

Question 16

Which of the following ratios is used to measure the profit earned on each dollar invested in a firm?

Accepted Answer

A)  Current ratio 
B)  Asset turnover 
C)  Return on sales 
D)  Return on equity 
A)  Current ratio 
B)  Asset turnover 
C)  Return on sales 
D)  Return on equity

Question 17

The following data came from the financial statements of the Cheviot Company:
  
-Refer to Exhibit 14-4. Compute the return on equity.

Accepted Answer

A)  40% 
B)  50% 
C)  30% 
D)  60% 
A)  40% 
B)  50% 
C)  30% 
D)  60%

Question 18

The balance sheet at the end of the current year of operations indicates the following:   If net income is $115,000 for 2012, what is the return on equity for 2012 (round percent to one decimal point)?

Accepted Answer

A)  10.6% 
B)  11.7% 
C)  12.4% 
D)  15.6% 
A)  10.6% 
B)  11.7% 
C)  12.4% 
D)  15.6%

Question 19

Financial statement analysis is greatly enhanced when financial ratios are compared with

Accepted Answer

A)  Past values 
B)  Future values 
C)  Values for other firms in the same industry 
D)  Both past values and values for other firms in the same industry 
A)  Past values 
B)  Future values 
C)  Values for other firms in the same industry 
D)  Both past values and values for other firms in the same industry

Question 20

Partial information from Blain Company's balance sheet is as follows:   What is Blain's current ratio?

Accepted Answer

A)  0.26 
B)  0.30 
C)  1.80 
D)  3.60 
A)  0.26 
B)  0.30 
C)  1.80 
D)  3.60

Exam 14: Analyzing Financial Statements

The return on equity ratio under the DuPont framework is computed as

The following data came from the financial statements of Petrini Company: -Refer to Exhibit 14-6. Given the information above, compute the assets-to-equity ratio (rounded to two decimal places) for Petrini Company.

The balance sheet at the end of the first year of operations indicates the following: -Refer to Exhibit 14-2. What is the debt ratio for 2012 (rounded to one decimal places)?

Which of the following ratios is decomposed using the DuPont framework?

External users of financial statements use financial statement analysis for

The financial statements for Kobe Corporation revealed that sales revenue was $1,581,000 and that the following were the ending account balances: Compute the following (round all numbers to one decimal place):

The income statement and balance sheet for the W. Gretsky Company for the year ended December 31, 2012, is presented below: Using the DuPont framework, compute (round to two decimal places):

Which of the following ratios represents an indication of investors' expectations concerning a firm's growth potential?

Amherst, Inc.'s financial statements contained the following information: Calculate the following:

The financial statements of Girard Company reflect the following data: Using the above information, compute the following ratios (round to two decimal places):

Which of the following ratios is used to measure a firm's profitability?

Which ratio represents how many times during the year a company is collecting its receivables?

Selected financial statement numbers for Frederick Company are given below: - Refer to Exhibit 14-5. Using the information above, calculate Frederick's average collection period (round to two decimal places).

Write out the formula for each of the following ratios:

Which of the following ratios is NOT an efficiency ratio?

Which of the following ratios is used to measure the profit earned on each dollar invested in a firm?

The following data came from the financial statements of the Cheviot Company: -Refer to Exhibit 14-4. Compute the return on equity.

The balance sheet at the end of the current year of operations indicates the following: If net income is $115,000 for 2012, what is the return on equity for 2012 (round percent to one decimal point)?

Financial statement analysis is greatly enhanced when financial ratios are compared with

Partial information from Blain Company's balance sheet is as follows: What is Blain's current ratio?

Accounting Information: Users and Uses

Financial Statements: An Overview

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Completing the Operating Cycle

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Management Accounting and Cost Concepts

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Controlling Cost and Profit

Inventory Management and Variable and Absorption Costing

Cost Behavior and Decisions Using C-V-P Analysis

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

Filters