Exam 17: Analysis of Financial Statements

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

(Multiple Choice)

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Question 161

_________________ applies analytical tools to general-purpose financial statements and related data for making business decisions.

(Short Answer)

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Question 162

Vertical analysis is a tool to evaluate individual financial statement items or groups of items in terms of a specific base amount.

(True/False)

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Question 163

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

(Multiple Choice)

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Question 164

The greater the times interest earned ratio,the greater the risk a company is exposed to.

(True/False)

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Question 165

A high level of expected risk suggests a low price-earnings ratio.

(True/False)

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Question 166

Comparative calendar-year financial data for a company are shown below.Calculate the following ratios for the company for 2014: (a)accounts receivable turnover (b)day's sales uncollected (c)inventory turnover (d)days' sales in inventory

(Essay)

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Question 167

Vertical analysis is used to reveal patterns in data covering successive periods.

(True/False)

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Question 168

When a company's activities include income-related events not part of normal,continuing operations,the complete income statement could potentially have the following sections:

(Multiple Choice)

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Question 169

Refer to the following selected financial information from Fennie's,LLC.Compute the company's days' sales uncollected for Year 2.

(Multiple Choice)

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Question 170

Quick assets divided by current liabilities is the:

(Multiple Choice)

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Question 171

The evaluation of company performance and financial condition includes evaluation of (1)past and current performance,(2)current financial position,and (3)future performance and risk.

(True/False)

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Question 172

Use the following selected information from Farris,LLC to determine the Year 2 and Year 1 trend percents for cost of goods sold using Year 1 as the base.

(Multiple Choice)

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Question 173

Financial statement analysis lessens the need for expert judgment.

(True/False)

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Question 174

Current assets divided by current liabilities is the:

(Multiple Choice)

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Question 175

Comparative statements for Kool Corporation are shown below: Calculate trend percentages for all income statement amounts shown and comment on the results.Use 2012 as the base year.Comment on the results.

(Essay)

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Question 176

Analysis of a single financial number is often of limited value.

(True/False)

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Question 177

Dividing accounts receivable,net by net sales and multiplying the result by 365 is the:

(Multiple Choice)

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Question 178

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Exam 17: Analysis of Financial Statements

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

_________________ applies analytical tools to general-purpose financial statements and related data for making business decisions.

Vertical analysis is a tool to evaluate individual financial statement items or groups of items in terms of a specific base amount.

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

The greater the times interest earned ratio,the greater the risk a company is exposed to.

A high level of expected risk suggests a low price-earnings ratio.

Comparative calendar-year financial data for a company are shown below.Calculate the following ratios for the company for 2014: (a)accounts receivable turnover (b)day's sales uncollected (c)inventory turnover (d)days' sales in inventory

Vertical analysis is used to reveal patterns in data covering successive periods.

When a company's activities include income-related events not part of normal,continuing operations,the complete income statement could potentially have the following sections:

Refer to the following selected financial information from Fennie's,LLC.Compute the company's days' sales uncollected for Year 2.

Quick assets divided by current liabilities is the:

The evaluation of company performance and financial condition includes evaluation of (1)past and current performance,(2)current financial position,and (3)future performance and risk.

Use the following selected information from Farris,LLC to determine the Year 2 and Year 1 trend percents for cost of goods sold using Year 1 as the base.

Financial statement analysis lessens the need for expert judgment.

Current assets divided by current liabilities is the:

Comparative statements for Kool Corporation are shown below: Calculate trend percentages for all income statement amounts shown and comment on the results.Use 2012 as the base year.Comment on the results.

Analysis of a single financial number is often of limited value.

Dividing accounts receivable,net by net sales and multiplying the result by 365 is the:

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

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