Question 1

Three of the most common tools of financial analysis are:

Accepted Answer

A) Financial reporting, ratio analysis, vertical analysis. 
B) Ratio analysis, horizontal analysis, financial reporting. 
C) Horizontal analysis, vertical analysis, ratio analysis. 
D) Trend analysis, financial reporting, ratio analysis. 
E) Vertical analysis, political analysis, horizontal analysis. 
A) Financial reporting, ratio analysis, vertical analysis. 
B) Ratio analysis, horizontal analysis, financial reporting. 
C) Horizontal analysis, vertical analysis, ratio analysis. 
D) Trend analysis, financial reporting, ratio analysis. 
E) Vertical analysis, political analysis, horizontal analysis.

Question 2

The common-size percent is computed by:

Accepted Answer

A) Dividing the analysis amount by the base amount. 
B) Dividing the base amount by the analysis amount. 
C) Dividing the analysis amount by the base amount and multiplying the result by 100. 
D) Dividing the base amount by the analysis amount and multiplying the result by 1,000. 
E) Subtracting the base amount from the analysis amount and multiplying the result by 100. 
A) Dividing the analysis amount by the base amount. 
B) Dividing the base amount by the analysis amount. 
C) Dividing the analysis amount by the base amount and multiplying the result by 100. 
D) Dividing the base amount by the analysis amount and multiplying the result by 1,000. 
E) Subtracting the base amount from the analysis amount and multiplying the result by 100.

Question 3

Three of the most common tools of financial analysis include horizontal analysis,vertical analysis,and ratio analysis.

Accepted Answer

A) True 
 B)False

Question 4

Refer to the following selected financial information from Fennie's,LLC.Compute the company's acid-test ratio for Year 2.

Accepted Answer

A) 2.26. 
B) 1.98. 
C) 2.95. 
D) 3.05. 
E) 1.88. 
A) 2.26. 
B) 1.98. 
C) 2.95. 
D) 3.05. 
E) 1.88.

Question 5

Three of the most common tools of financial analysis are (1)____________,(2)__________________,and (3)______________________.

Accepted Answer

horizontal analysis;

Question 6

The comparative balance sheet for Golden Co.is shown below.Express the balance sheet in common-size percents.

Accepted Answer

The answer of The comparative balance sheet for Golden Co.is...

Question 7

The percent change is computed by subtracting the analysis period amount from the base period amount,dividing the result by the base period amount and multiplying that result by 100.

Accepted Answer

A) True 
 B)False

Question 8

General-purpose financial statements include the (1)______________,(2)_____________,(3)_______________,(4)______________ and (5)________________.

Accepted Answer

income statement; balance shee

Question 9

Refer to the following selected financial information from Hansen's,LLC.Compute the company's profit margin for Year 2.

Accepted Answer

A) 14.1%. 
B) 11.7%. 
C) 9.6%. 
D) 16.7%. 
E) 33.9%. 
A) 14.1%. 
B) 11.7%. 
C) 9.6%. 
D) 16.7%. 
E) 33.9%.

Question 10

Financial analysis only refers to the communication of relevant financial information to decision makers.

Accepted Answer

A) True 
 B)False

Question 11

Financial reporting includes not only general purpose financial statements,but also information from SEC filings,press releases,shareholders' meetings,forecasts,management letters,auditor's reports,and Webcasts.

Accepted Answer

A) True 
 B)False

Question 12

Express the following income statement information in common-size percents (round to nearest whole percent).Comment on the results.

Accepted Answer

@#IMG-DLM& Comments: Although a smaller percent of

Question 13

Vertical analysis is the comparison of a company's financial condition and performance across time.

Accepted Answer

A) True 
 B)False

Question 14

Capital structure refers to a company's long-run financial viability and its ability to cover long-term obligations.

Accepted Answer

A) True 
 B)False

Question 15

In order to be classified as an extraordinary gain or loss,the item must be both (1)_______________ and (2)____________.

Accepted Answer

unusual; infrequent

Question 16

The base amount for a common-size balance sheet is usually total assets.

Accepted Answer

A) True 
 B)False

Question 17

Refer to the following selected financial information from Fennie's,LLC.Compute the company's inventory turnover for Year 2.

Accepted Answer

A) 4.72. 
B) 4.33. 
C) 3.17. 
D) 5.78. 
E) 3.86. 
A) 4.72. 
B) 4.33. 
C) 3.17. 
D) 5.78. 
E) 3.86.

Question 18

Standards for comparison are necessary when making judgments about a company's performance.

Accepted Answer

A) True 
 B)False

Question 19

Trend analysis is also called:

Accepted Answer

A) Financial analysis. 
B) Ratio analysis. 
C) Index number trend analysis. 
D) Industry analysis. 
E) Output analysis. 
A) Financial analysis. 
B) Ratio analysis. 
C) Index number trend analysis. 
D) Industry analysis. 
E) Output analysis.

Question 20

The following selected financial information for a company was reported for the current year end.Calculate the following company ratios:
(a)Accounts receivable turnover.
(b)Inventory turnover.
(c)Days' sales uncollected
Accounts receivable,beginning-year……………. $170,000
Accounts receivable,year-end…………………… 190,000
Merchandise inventory,beginning-year…………. 80,000
Merchandise inventory,year-end………………… 60,000
Cost of goods sold………………………………... 580,000
Credit sales………………………………………... 1,000,000

Accepted Answer

(a)Accounts receivable turnover =
$1,000

Exam 17: Analysis of Financial Statements

Three of the most common tools of financial analysis are:

The common-size percent is computed by:

Three of the most common tools of financial analysis include horizontal analysis,vertical analysis,and ratio analysis.

Refer to the following selected financial information from Fennie's,LLC.Compute the company's acid-test ratio for Year 2.

Three of the most common tools of financial analysis are (1)____________,(2)__________________,and (3)______________________.

The comparative balance sheet for Golden Co.is shown below.Express the balance sheet in common-size percents.

The percent change is computed by subtracting the analysis period amount from the base period amount,dividing the result by the base period amount and multiplying that result by 100.

General-purpose financial statements include the (1)______________,(2)_____________,(3)_______________,(4)______________ and (5)________________.

Refer to the following selected financial information from Hansen's,LLC.Compute the company's profit margin for Year 2.

Financial analysis only refers to the communication of relevant financial information to decision makers.

Financial reporting includes not only general purpose financial statements,but also information from SEC filings,press releases,shareholders' meetings,forecasts,management letters,auditor's reports,and Webcasts.

Express the following income statement information in common-size percents (round to nearest whole percent).Comment on the results.

Vertical analysis is the comparison of a company's financial condition and performance across time.

Capital structure refers to a company's long-run financial viability and its ability to cover long-term obligations.

In order to be classified as an extraordinary gain or loss,the item must be both (1)_______________ and (2)____________.

The base amount for a common-size balance sheet is usually total assets.

Refer to the following selected financial information from Fennie's,LLC.Compute the company's inventory turnover for Year 2.

Standards for comparison are necessary when making judgments about a company's performance.

Trend analysis is also called:

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

Three of the most common tools of financial analysis are (1),(2),and (3)____________.

General-purpose financial statements include the (1)________,(2)_,(3)_,(4) and (5)__________.

In order to be classified as an extraordinary gain or loss,the item must be both (1)___ and (2).