Question 1

In considering equity and debt financing, which of the following statements is generally true?

Accepted Answer

A) The lower the measure of the long-term debt-to-equity ratio, the greater the likelihood the company will have difficulty in meeting its obligation in some future period. 
B) Interest and dividend payments are required to be made by the issuing company. 
C) The higher the measure of the debt-to-equity ratio, the greater the likelihood the company will have difficulty in meeting its obligation in some future period. 
D) Most companies prefer to have no debt and rely exclusively on equity financing. 
A) The lower the measure of the long-term debt-to-equity ratio, the greater the likelihood the company will have difficulty in meeting its obligation in some future period. 
B) Interest and dividend payments are required to be made by the issuing company. 
C) The higher the measure of the debt-to-equity ratio, the greater the likelihood the company will have difficulty in meeting its obligation in some future period. 
D) Most companies prefer to have no debt and rely exclusively on equity financing.

Question 2

Information from the financial statements are provided below:
  
-Refer to Rio Imports. Which of the following statements is true concerning the company's debt management activities?

Accepted Answer

A) The company has a smaller percentage of capital from stockholders at the end of 2015 than at the end of 2014. 
B) The company relied more on creditors for financing during 2015 than in 2014. 
C) The company improved its debt-to-equity ratio. 
D) Relative to 2014, the company is in a weaker position at the end of 2015 to finance capital expenditures from cash flow generated by operating activities. 
A) The company has a smaller percentage of capital from stockholders at the end of 2015 than at the end of 2014. 
B) The company relied more on creditors for financing during 2015 than in 2014. 
C) The company improved its debt-to-equity ratio. 
D) Relative to 2014, the company is in a weaker position at the end of 2015 to finance capital expenditures from cash flow generated by operating activities.

Question 3

In a common size balance sheet to be used in vertical analysis, the 100% amount is

Accepted Answer

A) current assets. 
B) working capital. 
C) total assets. 
D) total stockholders' equity. 
A) current assets. 
B) working capital. 
C) total assets. 
D) total stockholders' equity.

Question 4

An increase in a company's revenue and expense accounts will always cause an increase in net income for the period.

Accepted Answer

A) True 
 B)False

Question 5

____________________ assets generally include cash, accounts receivable, and short-term investments.

Accepted Answer

The answer of ____________________ assets generally include cash, accounts receivable,...

Question 6

MATCHING
For each of the following sentences, select the phrase or group of words that best completes the statement.
a. Debt-to-equity ratio
b. Dividend payout ratio
c. Dividend yield ratio
d. Earnings per share
e. Leverage
f. Return on assets ratio
g. Return on common equity ratio
h. Stock repurchase payout
-Percentage of earnings paid out as dividends.

Accepted Answer

The answer of MATCHING
For each of the following sentences, select...

Question 7

Use the following selected financial data from the balance sheet at the end of 2015 and 2014:
   Using the information provided, address the following questions for both 2015 and 2014:

Accepted Answer

The answer of Use the following selected financial data from...

Question 8

Match these terms to their correct definition.
a.Common size statements
e.Ratio analysis
b.Cross-sectional analysis
f.Short-term liquidity ratios
c.Dupont analysis
g.Time series analysis
d.Horizontal analysis
h.Vertical analysis
-decomposes the return on equity ratio into margin, turnover, and leverage components.

Accepted Answer

The answer of Match these terms to their correct definition.
a.Common...

Question 9

Match these terms to their correct definition.
a.Common size statements
e.Ratio analysis
b.Cross-sectional analysis
f.Short-term liquidity ratios
c.Dupont analysis
g.Time series analysis
d.Horizontal analysis
h.Vertical analysis
-provides analysts with a wealth of information to evaluate such things as the corporation's profitability, asset and debt management, and short-term liquidity.

Accepted Answer

The answer of Match these terms to their correct definition.
a.Common...

Question 10

The return on assets ratio

Accepted Answer

A) considers the investments made by all creditors and stockholders of the company. 
B) reflects investments made only by creditors of the company. 
C) is based on average stockholders' equity as compared to net income for the period. 
D) is a measure of the company's liquidity. 
A) considers the investments made by all creditors and stockholders of the company. 
B) reflects investments made only by creditors of the company. 
C) is based on average stockholders' equity as compared to net income for the period. 
D) is a measure of the company's liquidity.

Question 11

The quick ratio

Accepted Answer

A) is generally larger than the current ratio. 
B) decreases when a company's assets becomes more liquid. 
C) increases when a company has more cash sales than credit sales. 
D) is larger when a company's assets are more liquid. 
A) is generally larger than the current ratio. 
B) decreases when a company's assets becomes more liquid. 
C) increases when a company has more cash sales than credit sales. 
D) is larger when a company's assets are more liquid.

Question 12

Which of the following combinations of ratios will best analyze a company's income statement performance?

Accepted Answer

A) gross profit percentage, return on common equity, and debt-to-equity 
B) gross profit percentage, earnings per share, and net profit margin percentage 
C) gross profit percentage, current ratio, and return on common equity 
D) gross profit percentage, net profit margin percentage, and debt-to-equity 
A) gross profit percentage, return on common equity, and debt-to-equity 
B) gross profit percentage, earnings per share, and net profit margin percentage 
C) gross profit percentage, current ratio, and return on common equity 
D) gross profit percentage, net profit margin percentage, and debt-to-equity

Question 13

Match these terms to their correct definition.
a.Common size statements
e.Ratio analysis
b.Cross-sectional analysis
f.Short-term liquidity ratios
c.Dupont analysis
g.Time series analysis
d.Horizontal analysis
h.Vertical analysis
-compares a corporation's financial statements to its primary competitors and industry averages.

Accepted Answer

The answer of Match these terms to their correct definition.
a.Common...

Question 14

Common size financial statements exclude the dollar amount as a relevant variable in the analysis, which makes comparison of one period with the next more meaningful.

Accepted Answer

A) True 
 B)False

Question 15

MATCHING
For each of the following sentences, select the phrase or group of words that best completes the statement.
a. Debt-to-equity ratio
b. Dividend payout ratio
c. Dividend yield ratio
d. Earnings per share
e. Leverage
f. Return on assets ratio
g. Return on common equity ratio
h. Stock repurchase payout
-Using debt to help the company earn a higher return.

Accepted Answer

The answer of MATCHING
For each of the following sentences, select...

Question 16

Information from the financial statements is provided below:
  
-Refer to Randstad, Inc. Earnings per share for 2015 would be reported as

Accepted Answer

A) $1.08. 
B) $1.20. 
C) $1.29. 
D) $1.43. 
A) $1.08. 
B) $1.20. 
C) $1.29. 
D) $1.43.

Question 17

Refer to Recovery Solutions, Inc. Calculate the return on common equity ratio for 2015 and 2014. Assume that preferred stock and total stockholders' equity at June 30, 2013, were $3,157 and $969,000, respectively.

Accepted Answer

The answer of Refer to Recovery Solutions, Inc. Calculate the...

Question 18

The current assets of Rock Garden Gifts were considered very liquid at December 31, 2015. This means that the company

Accepted Answer

A) has a larger quick ratio than current ratio. 
B) must decrease its liquidity in order to appear more favorable to potential investors. 
C) should attempt to borrow money in order to remain in business. 
D) is able to pay its current obligations using its current assets. 
A) has a larger quick ratio than current ratio. 
B) must decrease its liquidity in order to appear more favorable to potential investors. 
C) should attempt to borrow money in order to remain in business. 
D) is able to pay its current obligations using its current assets.

Question 19

Match these terms to their correct definition.
a.Accounts receivable turnover ratio
e.Net profit margin percentage
b.Cash ratio
f.Operating margin percentage
c.Gross profit percentage
g.Quick ratio
d.Inventory turnover ratio
h.Total payout ratio
-An even more conservative short-term liquidity ratio than the quick ratio.

Accepted Answer

The answer of Match these terms to their correct definition.
a.Accounts...

Question 20

Which of the following would report the market price of the company's stock?

Accepted Answer

A) balance sheet. 
B) income statement. 
C) statement of cash flows. 
D) Item 5 in Form 10-K. 
A) balance sheet. 
B) income statement. 
C) statement of cash flows. 
D) Item 5 in Form 10-K.

In considering equity and debt financing, which of the following statements is generally true?

Information from the financial statements are provided below: -Refer to Rio Imports. Which of the following statements is true concerning the company's debt management activities?

In a common size balance sheet to be used in vertical analysis, the 100% amount is

An increase in a company's revenue and expense accounts will always cause an increase in net income for the period.

____________________ assets generally include cash, accounts receivable, and short-term investments.

Use the following selected financial data from the balance sheet at the end of 2015 and 2014: Using the information provided, address the following questions for both 2015 and 2014:

The return on assets ratio

The quick ratio

Which of the following combinations of ratios will best analyze a company's income statement performance?

Common size financial statements exclude the dollar amount as a relevant variable in the analysis, which makes comparison of one period with the next more meaningful.

Information from the financial statements is provided below: -Refer to Randstad, Inc. Earnings per share for 2015 would be reported as

Refer to Recovery Solutions, Inc. Calculate the return on common equity ratio for 2015 and 2014. Assume that preferred stock and total stockholders' equity at June 30, 2013, were $3,157 and $969,000, respectively.

The current assets of Rock Garden Gifts were considered very liquid at December 31, 2015. This means that the company

Which of the following would report the market price of the company's stock?

Accounting and the Financial Statements

The Accounting Information System

Accrual Accounting

Internal Control and Cash

Sales and Receivables

Cost of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Investments

Time Value of Money

Filters

Exam 12: Financial Statement Analysis

In considering equity and debt financing, which of the following statements is generally true?

Information from the financial statements are provided below: -Refer to Rio Imports. Which of the following statements is true concerning the company's debt management activities?

In a common size balance sheet to be used in vertical analysis, the 100% amount is

An increase in a company's revenue and expense accounts will always cause an increase in net income for the period.

____________________ assets generally include cash, accounts receivable, and short-term investments.

Use the following selected financial data from the balance sheet at the end of 2015 and 2014: Using the information provided, address the following questions for both 2015 and 2014:

The return on assets ratio

The quick ratio

Which of the following combinations of ratios will best analyze a company's income statement performance?

Common size financial statements exclude the dollar amount as a relevant variable in the analysis, which makes comparison of one period with the next more meaningful.

Information from the financial statements is provided below: -Refer to Randstad, Inc. Earnings per share for 2015 would be reported as

Refer to Recovery Solutions, Inc. Calculate the return on common equity ratio for 2015 and 2014. Assume that preferred stock and total stockholders' equity at June 30, 2013, were $3,157 and $969,000, respectively.

The current assets of Rock Garden Gifts were considered very liquid at December 31, 2015. This means that the company

Which of the following would report the market price of the company's stock?

Accounting and the Financial Statements

The Accounting Information System

Accrual Accounting

Internal Control and Cash

Sales and Receivables

Cost of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Investments

Time Value of Money

Filters