Question 1

Horizontal analysis and vertical analysis are used to analyze the performance of a single company.

Accepted Answer

A) True 
 B)False

Question 2

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 $45,000.
There are 25,000 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 book value per share of common stock on the last day of the current year?

Accepted Answer

A) $11.60 
B) $25.00 
C) $6.92 
D) $48.80 
A) $11.60 
B) $25.00 
C) $6.92 
D) $48.80

Question 3

The following information relates to Tappan Corporation.
   Required:
a. What is the book value per share of common stock for the current year?
b. What is the price-earnings ratio for the current year?
c. What is the rate of return on total assets for the current year?
d. What is the times-interest-earned ratio for the current year?

Accepted Answer

Part a.
 @#IMG-DLM&

Question 4

To follow is selected information about the Little Dipper Company for the current year and prior year.   What is the current year's income tax percentage (as would be found on a vertical analysis of the income statement for the current year)?

Accepted Answer

A) 4)15% 
B) 8)85% 
C) 24.07% 
D) 18.07% 
A) 4)15% 
B) 8)85% 
C) 24.07% 
D) 18.07%

Question 5

The Ranger Corporation data for the current year and prior year is as follows:   What would a horizontal analysis report with respect to net income show?

Accepted Answer

A) Both net income before tax expense and net income are 8.99% of net sales revenue. 
B) There was an increase in net income of 52.86%. 
C) Both net income before income tax expense and net income increased by $18,500. 
D) The current ratio is 4.26. 
A) Both net income before tax expense and net income are 8.99% of net sales revenue. 
B) There was an increase in net income of 52.86%. 
C) Both net income before income tax expense and net income increased by $18,500. 
D) The current ratio is 4.26.

Question 6

All of the following are red flags that a company is in financial trouble except

Accepted Answer

A) Buildup of inventories 
B) A current ratio close to 2.0 
C) Too much debt 
D) Decreased cash flow 
A) Buildup of inventories 
B) A current ratio close to 2.0 
C) Too much debt 
D) Decreased cash flow

Question 7

The following selected information relates to Candle Company for the past two years.   What is days' sales in receivables for the current year?

Accepted Answer

A) 153.42 days 
B) 68.49 days 
C) 42.19 days 
D) 2)40 days 
A) 153.42 days 
B) 68.49 days 
C) 42.19 days 
D) 2)40 days

Question 8

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

Accepted Answer

A) 2)37 times 
B) 0)42 times 
C) 5)65 times 
D) 3)19 times 
A) 2)37 times 
B) 0)42 times 
C) 5)65 times 
D) 3)19 times

Question 9

The following selected information relates to Candle Company for the past two years.   What is the book value per share of common stock for the current year?

Accepted Answer

A) $72.86 
B) $23.43 
C) $49.43 
D) $96.29 
A) $72.86 
B) $23.43 
C) $49.43 
D) $96.29

Question 10

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 dollar change in selling/general expenses?

Accepted Answer

A) $(160) 
B) $87,000 
C) $20,000 
D) $(110,000) 
A) $(160) 
B) $87,000 
C) $20,000 
D) $(110,000)

Question 11

Common-sized financial statements are included in which type of analysis?

Accepted Answer

A) Vertical analysis 
B) Trend analysis 
C) Ratio analysis 
D) Horizontal analysis 
A) Vertical analysis 
B) Trend analysis 
C) Ratio analysis 
D) Horizontal analysis

Question 12

A common size statement reports only dollar values.

Accepted Answer

A) True 
 B)False

Question 13

The following selected information relates to Candle Company for the past two years.   What is the rate of return on total assets for the current year?

Accepted Answer

A) 9)23% 
B) 7)69% 
C) 18.82% 
D) 18.11% 
A) 9)23% 
B) 7)69% 
C) 18.82% 
D) 18.11%

Question 14

The formula to compute the rate of return on net sales is

Accepted Answer

A) net income/net sales. 
B) net income/average common stockholder's equity. 
C) net income + interest expense, then divide by average total assets. 
D) net income/interest expense. 
A) net income/net sales. 
B) net income/average common stockholder's equity. 
C) net income + interest expense, then divide by average total assets. 
D) net income/interest expense.

Question 15

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

Accepted Answer

A) Inventory turnover of 9.02 times 
B) Current ratio of 4.48. 
C) A 27.99% increase in current assets 
D) Current assets are 100.00% of total assets 
A) Inventory turnover of 9.02 times 
B) Current ratio of 4.48. 
C) A 27.99% increase in current assets 
D) Current assets are 100.00% of total assets

Question 16

The ability of a company to sell inventory is measured by which of the following ratios?

Accepted Answer

A) Acid-test ratio 
B) Inventory turnover ratio 
C) Current ratio 
D) Day's sales in receivables 
A) Acid-test ratio 
B) Inventory turnover ratio 
C) Current ratio 
D) Day's sales in receivables

Question 17

The Bristol Corporation data for the current year and prior year is as follows:   With respect to selling/general expenses, what would a horizontal analysis report?

Accepted Answer

A) The current ratio is 0.44. 
B) There was a 4.28% increase from prior to current year. 
C) There was a 4.28% decrease from prior to current year. 
D) Selling/general expenses are 108.27% of net sales revenue. 
A) The current ratio is 0.44. 
B) There was a 4.28% increase from prior to current year. 
C) There was a 4.28% decrease from prior to current year. 
D) Selling/general expenses are 108.27% of net sales revenue.

Question 18

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 $45,000.
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 times-interest-earned ratio for the current year?

Accepted Answer

A) 1)90 times 
B) 1)00 times 
C) 4)67 times 
D) 0)21 times 
A) 1)90 times 
B) 1)00 times 
C) 4)67 times 
D) 0)21 times

Question 19

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 $11,000 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 acid-test ratio for the current year?

Accepted Answer

A) 0)31 
B) 0)90 
C) 10.56 
D) 1)11 
A) 0)31 
B) 0)90 
C) 10.56 
D) 1)11

Question 20

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

Accepted Answer

A) There is a sales return of $0.11. 
B) There was an increase of 17.93% in net sales revenue. 
C) The cost of goods sold is 77.37% of net sales revenue. 
D) There is an accounts receivable turnover of 10.26 times. 
A) There is a sales return of $0.11. 
B) There was an increase of 17.93% in net sales revenue. 
C) The cost of goods sold is 77.37% of net sales revenue. 
D) There is an accounts receivable turnover of 10.26 times.

Horizontal analysis and vertical analysis are used to analyze the performance of a single company.

To follow is selected information about the Little Dipper Company for the current year and prior year. What is the current year's income tax percentage (as would be found on a vertical analysis of the income statement for the current year)?

The Ranger Corporation data for the current year and prior year is as follows: What would a horizontal analysis report with respect to net income show?

All of the following are red flags that a company is in financial trouble except

The following selected information relates to Candle Company for the past two years. What is days' sales in receivables for the current year?

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

The following selected information relates to Candle Company for the past two years. What is the book value per share of common stock for the current year?

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 dollar change in selling/general expenses?

Common-sized financial statements are included in which type of analysis?

A common size statement reports only dollar values.

The following selected information relates to Candle Company for the past two years. What is the rate of return on total assets for the current year?

The formula to compute the rate of return on net sales is

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

The ability of a company to sell inventory is measured by which of the following ratios?

The Bristol Corporation data for the current year and prior year is as follows: With respect to selling/general expenses, what would a horizontal 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 net sales revenue?

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

Horizontal analysis and vertical analysis are used to analyze the performance of a single company.

To follow is selected information about the Little Dipper Company for the current year and prior year. What is the current year's income tax percentage (as would be found on a vertical analysis of the income statement for the current year)?

The Ranger Corporation data for the current year and prior year is as follows: What would a horizontal analysis report with respect to net income show?

All of the following are red flags that a company is in financial trouble except

The following selected information relates to Candle Company for the past two years. What is days' sales in receivables for the current year?

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

The following selected information relates to Candle Company for the past two years. What is the book value per share of common stock for the current year?

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 dollar change in selling/general expenses?

Common-sized financial statements are included in which type of analysis?

A common size statement reports only dollar values.

The following selected information relates to Candle Company for the past two years. What is the rate of return on total assets for the current year?

The formula to compute the rate of return on net sales is

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

The ability of a company to sell inventory is measured by which of the following ratios?

The Bristol Corporation data for the current year and prior year is as follows: With respect to selling/general expenses, what would a horizontal 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 net sales revenue?

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