Question 1

Working capital is current assets divided by current liabilities.

Accepted Answer

A) True 
 B)False

Question 2

The Hummel Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year.   Inventory and prepaid expenses account for $28,000 of the current year's current assets.
Average inventory for the current year is $12,000.
Average net accounts receivable for the current year is $32,000.
There are 40,000 shares of common stock outstanding.
Total dividends paid during the current year were $60,000.
The market price per share of common stock is $25.
What is the company's rate of return on total assets for the current year?

Accepted Answer

A) 23.09% 
B) 32.80% 
C) 28.70% 
D) 13.37% 
A) 23.09% 
B) 32.80% 
C) 28.70% 
D) 13.37%

Question 3

Which of the following is considered a strong current ratio

Accepted Answer

A) 0)4 
B) 0)8 
C) -1.0 
D) 2)0 
A) 0)4 
B) 0)8 
C) -1.0 
D) 2)0

Question 4

Use the following information to do a horizontal analysis of Rae Company's income statement for the current year and prior year   What is the percentage change in cost of goods sold?

Accepted Answer

A) 78.61% 
B) 27.21% 
C) 53.19% 
D) 34.72% 
A) 78.61% 
B) 27.21% 
C) 53.19% 
D) 34.72%

Question 5

Gavette Company reported the following information for the current year and prior year:   What would a vertical analysis report with respect to the relationship between current year net sales revenue and COGS?

Accepted Answer

A) COGS was 60.00% of net sales revenue 
B) A 8.20% decrease from prior to current year 
C) An increase of $19,680 from prior to current year 
D) An increase of $146,880 from prior to current year 
A) COGS was 60.00% of net sales revenue 
B) A 8.20% decrease from prior to current year 
C) An increase of $19,680 from prior to current year 
D) An increase of $146,880 from prior to current year

Question 6

Gavette Company reported the following information for the current year and prior year:   With respect to current year net sales revenue, what would a vertical analysis report?

Accepted Answer

A) COGS would be 62.31% of net sales revenue 
B) A dividend yield of $18.84 
C) A decrease of 21.00% in net sales revenue 
D) Net sales revenue would be the base amount 
A) COGS would be 62.31% of net sales revenue 
B) A dividend yield of $18.84 
C) A decrease of 21.00% in net sales revenue 
D) Net sales revenue would be the base amount

Question 7

The Goodberry Corporation data for the current year and prior year is as follows:   What would a horizontal analysis report with respect to current liabilities?

Accepted Answer

A) Current liabilities saw a 28.45% increase from the prior year to the current year. 
B) Current liabilities are 156.97% of total capital. 
C) The current ratio is 1.36. 
D) Current liabilities saw a 22.15% increase from the prior year to the current year. 
A) Current liabilities saw a 28.45% increase from the prior year to the current year. 
B) Current liabilities are 156.97% of total capital. 
C) The current ratio is 1.36. 
D) Current liabilities saw a 22.15% increase from the prior year to the current year.

Question 8

The Amos Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year.   Inventory and prepaid expenses account for $30,000 of the current year's current assets.
Average inventory for the current year is $36,250.
Average net accounts receivable for the current year is $51,000.
There are 35,000 shares of common stock outstanding.
Total dividends paid during the current year were $17,000.
The market price per share of common stock is $20.
What is the days' sales in receivables for the current year?

Accepted Answer

A) 31.76 days 
B) 2)29 days 
C) 1)20 days 
D) 11.49 days 
A) 31.76 days 
B) 2)29 days 
C) 1)20 days 
D) 11.49 days

Question 9

An accurate description of horizontal analysis would be which of the following?

Accepted Answer

A) Study of percentage changes in various financial statement amounts from year to year 
B) Study of changes in individual financial statement amounts as a percentage of a related base amount 
C) Study of changes in key financial ratios from year to year 
D) None of the above 
A) Study of percentage changes in various financial statement amounts from year to year 
B) Study of changes in individual financial statement amounts as a percentage of a related base amount 
C) Study of changes in key financial ratios from year to year 
D) None of the above

Question 10

All of the following measure a company's ability to pay current liabilities except

Accepted Answer

A) Accounts Receivable Turnover. 
B) Current Ratio. 
C) Working Capital. 
D) Acid-Test Ratio. 
A) Accounts Receivable Turnover. 
B) Current Ratio. 
C) Working Capital. 
D) Acid-Test Ratio.

Question 11

Net income is used as the base for vertical analysis percentages on the income statement.

Accepted Answer

A) True 
 B)False

Question 12

The following selected information relates to Belcher Unlimited for the past two years.   The book value per share of common stock for the current year is

Accepted Answer

A) $136.88. 
B) $124.22. 
C) $175.47. 
D) $99.22. 
A) $136.88. 
B) $124.22. 
C) $175.47. 
D) $99.22.

Question 13

The following information relates to Winder Corporation.
   Required:
a. What is the acid-test ratio for the current year?
b. What is the inventory turnover for the current year?
c. What is days' sales in receivables for the current year?
d. What is the current ratio for the current year?

Accepted Answer

Part a.
 @#IMG-DLM&

Question 14

The Hummel Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year.   Inventory and prepaid expenses account for $28,000 of the current year's current assets.
Average inventory for the current year is $12,000.
Average net accounts receivable for the current year is $32,000.
There are 30,000 shares of common stock outstanding.
Total dividends paid during the current year were $60,000.
The market price per share of common stock is $25.
What is the company's earnings per share for the current year?

Accepted Answer

A) $26.67 
B) $2.63 
C) $8.67 
D) $13.33 
A) $26.67 
B) $2.63 
C) $8.67 
D) $13.33

Question 15

The Bristol Corporation data for the current year and prior year is as follows:   With respect to long-term liabilities, what would a horizontal analysis report?

Accepted Answer

A) Long-term liabilities decreased by 11.76%. 
B) Long-term liabilities increased by $4000. 
C) Long-term liabilities increased by 11.76%. 
D) Long-term liabilities decreased by $4000. 
A) Long-term liabilities decreased by 11.76%. 
B) Long-term liabilities increased by $4000. 
C) Long-term liabilities increased by 11.76%. 
D) Long-term liabilities decreased by $4000.

Question 16

Gavette Company reported the following information for the current year and prior year:   What would a vertical analysis report with respect to current year selling and general expenses?

Accepted Answer

A) An increase of $74,768 
B) 23.63% of net sales revenue 
C) A decrease of 23.63% 
D) 16.37% of net sales revenue 
A) An increase of $74,768 
B) 23.63% of net sales revenue 
C) A decrease of 23.63% 
D) 16.37% of net sales revenue

Question 17

The following selected information relates to Candle Company for the past two years.   What is the current ratio for the current year?

Accepted Answer

A) 1)00 
B) 4)77 
C) 1)75 
D) 0)42 
A) 1)00 
B) 4)77 
C) 1)75 
D) 0)42

Question 18

The following information relates to Contessa Corporation.
   Required:
a. What is the acid-test ratio for the current year?
b. What is the inventory turnover for the current year?
c. What is days' sales in receivables for the current year?
d. What is the book value per share of common stock for the current year?
e. What is the price-earnings ratio for the current year?
f. What is the rate of return on total assets for the current year?
g. What is the times-interest-earned ratio for the current year?
h. What is the current ratio for the current year?

Accepted Answer

Part a.
 @#IMG-DLM& Part b.
 @#IMG-DLM&

Question 19

The Goodberry Corporation data for the current year and prior year is as follows:   What would a horizontal analysis report with respect to long-term liabilities?

Accepted Answer

A) Long-term liabilities increased by $6000. 
B) Long-term liabilities decreased by 29.46%. 
C) Long-term liabilities increased by 17.14%. 
D) Long-term liabilities decreased by $16,500. 
A) Long-term liabilities increased by $6000. 
B) Long-term liabilities decreased by 29.46%. 
C) Long-term liabilities increased by 17.14%. 
D) Long-term liabilities decreased by $16,500.

Question 20

The ________ ratio measures the ability of a company to pay all current liabilities if they came due immediately.

Accepted Answer

A) inventory turnover 
B) current 
C) day's sales in receivables 
D) acid-test 
A) inventory turnover 
B) current 
C) day's sales in receivables 
D) acid-test

Working capital is current assets divided by current liabilities.

Which of the following is considered a strong current ratio

Use the following information to do a horizontal analysis of Rae Company's income statement for the current year and prior year What is the percentage change in cost of goods sold?

Gavette Company reported the following information for the current year and prior year: What would a vertical analysis report with respect to the relationship between current year net sales revenue and COGS?

Gavette Company reported the following information for the current year and prior year: With respect to current year net sales revenue, what would a vertical analysis report?

The Goodberry Corporation data for the current year and prior year is as follows: What would a horizontal analysis report with respect to current liabilities?

An accurate description of horizontal analysis would be which of the following?

All of the following measure a company's ability to pay current liabilities except

Net income is used as the base for vertical analysis percentages on the income statement.

The following selected information relates to Belcher Unlimited for the past two years. The book value per share of common stock for the current year is

The following information relates to Winder Corporation. Required: a. What is the acid-test ratio for the current year? b. What is the inventory turnover for the current year? c. What is days' sales in receivables for the current year? d. What is the current ratio for the current year?

The Bristol Corporation data for the current year and prior year is as follows: With respect to long-term liabilities, what would a horizontal analysis report?

Gavette Company reported the following information for the current year and prior year: What would a vertical analysis report with respect to current year selling and general expenses?

The following selected information relates to Candle Company for the past two years. What is the current ratio for the current year?

The Goodberry Corporation data for the current year and prior year is as follows: What would a horizontal analysis report with respect to long-term liabilities?

The ________ ratio measures the ability of a company to pay all current liabilities if they came due immediately.

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evalulation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Sustainability

Filters

Exam 14: Financial Statement Analysis

Working capital is current assets divided by current liabilities.

Which of the following is considered a strong current ratio

Use the following information to do a horizontal analysis of Rae Company's income statement for the current year and prior year What is the percentage change in cost of goods sold?

Gavette Company reported the following information for the current year and prior year: What would a vertical analysis report with respect to the relationship between current year net sales revenue and COGS?

Gavette Company reported the following information for the current year and prior year: With respect to current year net sales revenue, what would a vertical analysis report?

The Goodberry Corporation data for the current year and prior year is as follows: What would a horizontal analysis report with respect to current liabilities?

An accurate description of horizontal analysis would be which of the following?

All of the following measure a company's ability to pay current liabilities except

Net income is used as the base for vertical analysis percentages on the income statement.

The following selected information relates to Belcher Unlimited for the past two years. The book value per share of common stock for the current year is

The following information relates to Winder Corporation. Required: a. What is the acid-test ratio for the current year? b. What is the inventory turnover for the current year? c. What is days' sales in receivables for the current year? d. What is the current ratio for the current year?

The Bristol Corporation data for the current year and prior year is as follows: With respect to long-term liabilities, what would a horizontal analysis report?

Gavette Company reported the following information for the current year and prior year: What would a vertical analysis report with respect to current year selling and general expenses?

The following selected information relates to Candle Company for the past two years. What is the current ratio for the current year?

The Goodberry Corporation data for the current year and prior year is as follows: What would a horizontal analysis report with respect to long-term liabilities?

The ________ ratio measures the ability of a company to pay all current liabilities if they came due immediately.

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evalulation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Sustainability

Filters