Question 1

A trend percent,or index number,is calculated by dividing the analysis period amount by the base period amount and multiplying the result by 100.

Accepted Answer

A) True 
 B)False

Question 2

A good financial statement analysis report usually includes the following six sections:
 (1)________________________,(2)______________________,(3)_________________,(4)__________________ (5)____________________,and (6)______________________.

Accepted Answer

executive summary; analysis ov

Question 3

Describe the purpose of horizontal financial statement analysis and how it is applied.

Accepted Answer

Horizontal analysis is a tool to evaluat

Question 4

Measures taken from a selected competitor or a group of competitors are often excellent standards of comparison for analysis.

Accepted Answer

A) True 
 B)False

Question 5

______________________ ratios include the price-earnings ratio and dividend yield.

Accepted Answer

The answer of ______________________ ratios include the price-earnings ratio and...

Question 6

What is the purpose of a good financial statement analysis report?
 What are the key components?

Accepted Answer

A good financial statement analysis repo

Question 7

Liquidity refers to the availability of resources to meet short-term cash requirements.

Accepted Answer

A) True 
 B)False

Question 8

Selected current year end financial information for a company is presented below.Calculate the following company ratios:
(a)Profit margin.
(b)Total asset turnover.
(c)Return on total assets.
(d)Return on common stockholders' equity (assume the company has no preferred stock).
Net income……………………………….. $ 325,000
Net sales………………………………….. 4,700,000
Total liabilities,beginning-year………….. 550,000
Total liabilities,end-of-year……………… 530,000
Total stockholders' equity,beginning-year. 760,000
Total stockholders' equity,end-of-year….. 745,000

Accepted Answer

(a)Profit margin = ($325,000/$4,700,000)

Question 9

Working capital is computed as current liabilities minus current assets.

Accepted Answer

A) True 
 B)False

Question 10

One purpose of financial statement analysis for internal users is to provide information helpful in improving the company's efficiency and effectiveness in providing products and services.

Accepted Answer

A) True 
 B)False

Question 11

Financial information for Omega Corporation is presented below.Calculate the following ratios for 2014:
(a)Inventory turnover.
(b)Accounts receivable turnover.
(c)Return on total assets.
(d)Times interest earned.
(e)Total asset turnover.

Accepted Answer

(a)Inventory turnover:
$123,000/[($61,00

Question 12

A common focus of financial statement users in evaluating a company's performance includes evaluation of its (1)__________________,(2)______________,and (3)___________________.

Accepted Answer

past and current performance;

Question 13

The measurement of key relationships between financial statement items is known as ________________.

Accepted Answer

The answer of The measurement of key relationships between financial...

Question 14

The ability to provide financial rewards sufficient to attract and retain financing is called:

Accepted Answer

A) Liquidity and efficiency. 
B) Solvency. 
C) Profitability. 
D) Market prospects. 
E) Creditworthiness. 
A) Liquidity and efficiency. 
B) Solvency. 
C) Profitability. 
D) Market prospects. 
E) Creditworthiness.

Question 15

The background on a company,its industry,and its economic setting is usually included in which of the following sections of a financial statement analysis report:

Accepted Answer

A) Executive summary. 
B) Analysis overview. 
C) Evidential conclusions. 
D) Factor analysis. 
E) Inferences. 
A) Executive summary. 
B) Analysis overview. 
C) Evidential conclusions. 
D) Factor analysis. 
E) Inferences.

Question 16

Evaluation of company performance does not include analysis of (1)past and current performance,(2)current financial position,and (3)future performance and risk.

Accepted Answer

A) True 
 B)False

Question 17

Selected current year company information follows:
  The return on total assets is:

Accepted Answer

A) 2.24% 
B) 2.81% 
C) 3.64% 
D) 4.67% 
E) 6.28% 
A) 2.24% 
B) 2.81% 
C) 3.64% 
D) 4.67% 
E) 6.28%

Question 18

External users of financial information:

Accepted Answer

A) Are those individuals involved in managing and operating the company. 
B) Include internal auditors and consultants. 
C) Are not directly involved in operating the company. 
D) Make strategic decisions for a company. 
E) Make operating decisions for a company. 
A) Are those individuals involved in managing and operating the company. 
B) Include internal auditors and consultants. 
C) Are not directly involved in operating the company. 
D) Make strategic decisions for a company. 
E) Make operating decisions for a company.

Question 19

Use the following selected information from Farris,LLC to determine the Year 2 and Year 1 common size percents for operating expenses using Year 1 net sales as the base.

Accepted Answer

A) 36.4% for Year 2 and 41.1% for Year 1. 
B) 55.0% for Year 2 and 56.0% for Year 1. 
C) 119.4% for Year 2 and 100.0% for Year 1. 
D) 103.8% for Year 2 and 100.0% for Year 1. 
E) 20.0% for Year 2 and 23.0% for Year 1. 
A) 36.4% for Year 2 and 41.1% for Year 1. 
B) 55.0% for Year 2 and 56.0% for Year 1. 
C) 119.4% for Year 2 and 100.0% for Year 1. 
D) 103.8% for Year 2 and 100.0% for Year 1. 
E) 20.0% for Year 2 and 23.0% for Year 1.

Question 20

Describe the purpose of vertical financial statement analysis and how it is applied.

Accepted Answer

Vertical financial statement analysis is

Exam 17: Analysis of Financial Statements

A trend percent,or index number,is calculated by dividing the analysis period amount by the base period amount and multiplying the result by 100.

A good financial statement analysis report usually includes the following six sections: (1)________________________,(2)______________________,(3)_________________,(4)__________________ (5)____________________,and (6)______________________.

Describe the purpose of horizontal financial statement analysis and how it is applied.

Measures taken from a selected competitor or a group of competitors are often excellent standards of comparison for analysis.

______________________ ratios include the price-earnings ratio and dividend yield.

What is the purpose of a good financial statement analysis report? What are the key components?

Liquidity refers to the availability of resources to meet short-term cash requirements.

Working capital is computed as current liabilities minus current assets.

One purpose of financial statement analysis for internal users is to provide information helpful in improving the company's efficiency and effectiveness in providing products and services.

Financial information for Omega Corporation is presented below.Calculate the following ratios for 2014: (a)Inventory turnover. (b)Accounts receivable turnover. (c)Return on total assets. (d)Times interest earned. (e)Total asset turnover.

A common focus of financial statement users in evaluating a company's performance includes evaluation of its (1)__________________,(2)______________,and (3)___________________.

The measurement of key relationships between financial statement items is known as ________________.

The ability to provide financial rewards sufficient to attract and retain financing is called:

The background on a company,its industry,and its economic setting is usually included in which of the following sections of a financial statement analysis report:

Evaluation of company performance does not include analysis of (1)past and current performance,(2)current financial position,and (3)future performance and risk.

Selected current year company information follows: The return on total assets is:

External users of financial information:

Use the following selected information from Farris,LLC to determine the Year 2 and Year 1 common size percents for operating expenses using Year 1 net sales as the base.

Describe the purpose of vertical financial statement analysis and how it is applied.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

Filters

A good financial statement analysis report usually includes the following six sections: (1)__________,(2),(3)_,(4) (5),and (6)____________.

A common focus of financial statement users in evaluating a company's performance includes evaluation of its (1),(2),and (3)___.