Question 1

Financial statement analysis applies analytical tools to financial statements and related data for making business decisions.

Accepted Answer

A) True 
 B)False

Question 2

Identify and describe three common tools of financial statement analysis.

Accepted Answer

Analysis: Three common tools of financia

Question 3

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

Accepted Answer

Financial

Question 4

The four building blocks of financial analysis are (1)________,(2)________,(3)________ and (4)________.

Accepted Answer

liquidity and efficiency; solv

Question 5

The ability to generate positive market expectations is called:

Accepted Answer

A) Liquidity and efficiency. 
B) Liquidity and solvency. 
C) Profitability. 
D) Market prospects. 
E) Creditworthiness. 
A) Liquidity and efficiency. 
B) Liquidity and solvency. 
C) Profitability. 
D) Market prospects. 
E) Creditworthiness.

Question 6

The return on total assets can be calculated as profit margin times total asset turnover.

Accepted Answer

A) True 
 B)False

Question 7

The gross margin ratio,return on total assets,and basic earnings per share are all ________ ratios.

Accepted Answer

The answer of The gross margin ratio,return on total assets,and...

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

A corporation reported cash of $27,000,total assets of $461,000,and total equity of $157,895 on its balance sheet.Its common-size percent for cash equals:

Accepted Answer

A) 17.1%. 
B) 58.6%. 
C) 100%. 
D) 5.86%. 
E) 1707%. 
A) 17.1%. 
B) 58.6%. 
C) 100%. 
D) 5.86%. 
E) 1707%.

Question 10

Selected balances from a company's financial statements are shown below.Calculate the following ratios for Year 2:
(a)accounts receivable turnover
(b)inventory turnover
(c)days' sales uncollected
(d)days' sales in inventory
(d)profit margin.
(e)return on total assets.

Accepted Answer

The answer of Selected balances from a company's financial statements...

Question 11

The debt ratio,the equity ratio,debt-to-equity ratio,and times interest earned are all ________ ratios.

Accepted Answer

The answer of The debt ratio,the equity ratio,debt-to-equity ratio,and times...

Question 12

The comparison of a company's financial condition and performance to a base amount is known as:

Accepted Answer

A) Financial reporting. 
B) Horizontal ratios. 
C) Liquidation analysis. 
D) Sensitivity analysis. 
E) Vertical analysis. 
A) Financial reporting. 
B) Horizontal ratios. 
C) Liquidation analysis. 
D) Sensitivity analysis. 
E) Vertical analysis.

Question 13

Refer to the following selected financial information from Texas Electronics.
 
-Compute the company's days' sales in inventory for Year 2.(Use 365 days a year.)

Accepted Answer

A) 43.9. 
B) 42.3. 
C) 46.2. 
D) 80.0. 
E) 113.2. 
A) 43.9. 
B) 42.3. 
C) 46.2. 
D) 80.0. 
E) 113.2.

Question 14

An advantage of common-size statements is that they show patterns in data across periods.

Accepted Answer

A) True 
 B)False

Question 15

A business segment is a part of a company that is separated by its (1)________ or (2)________.

Accepted Answer

products/services; g

Question 16

A company reports basic earnings per share of $3.50,cash dividends per share of $1.25,and a market price per share of $64.75.The company's dividend yield equals:

Accepted Answer

A) 1.93%. 
B) 2.14%. 
C) 4.67%. 
D) 5.41%. 
E) 18.50%. 
A) 1.93%. 
B) 2.14%. 
C) 4.67%. 
D) 5.41%. 
E) 18.50%.

Question 17

The building blocks of financial statement analysis include (1)liquidity,(2)salability,(3)solvency,and (4)fair presentation.

Accepted Answer

A) True 
 B)False

Question 18

Profitability is the ability to generate future revenues and meet long-term obligations.

Accepted Answer

A) True 
 B)False

Question 19

When an item has a value in the base period and zero in the analysis period,the decrease is 100 percent.

Accepted Answer

A) True 
 B)False

Question 20

The building blocks of financial statement analysis include (1)liquidity,(2)solvency,(3)profitability,and (4)market prospects.

Accepted Answer

A) True 
 B)False

Exam 13: Analysis of Financial Statements

Financial statement analysis applies analytical tools to financial statements and related data for making business decisions.

Identify and describe three common tools of financial statement analysis.

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

The four building blocks of financial analysis are (1)________,(2)________,(3)________ and (4)________.

The ability to generate positive market expectations is called:

The return on total assets can be calculated as profit margin times total asset turnover.

The gross margin ratio,return on total assets,and basic earnings per share are all ________ ratios.

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

A corporation reported cash of $27,000,total assets of $461,000,and total equity of $157,895 on its balance sheet.Its common-size percent for cash equals:

Selected balances from a company's financial statements are shown below.Calculate the following ratios for Year 2: (a)accounts receivable turnover (b)inventory turnover (c)days' sales uncollected (d)days' sales in inventory (d)profit margin. (e)return on total assets.

The debt ratio,the equity ratio,debt-to-equity ratio,and times interest earned are all ________ ratios.

The comparison of a company's financial condition and performance to a base amount is known as:

Refer to the following selected financial information from Texas Electronics. -Compute the company's days' sales in inventory for Year 2.(Use 365 days a year.)

An advantage of common-size statements is that they show patterns in data across periods.

A business segment is a part of a company that is separated by its (1)________ or (2)________.

A company reports basic earnings per share of $3.50,cash dividends per share of $1.25,and a market price per share of $64.75.The company's dividend yield equals:

The building blocks of financial statement analysis include (1)liquidity,(2)salability,(3)solvency,and (4)fair presentation.

Profitability is the ability to generate future revenues and meet long-term obligations.

When an item has a value in the base period and zero in the analysis period,the decrease is 100 percent.

The building blocks of financial statement analysis include (1)liquidity,(2)solvency,(3)profitability,and (4)market prospects.

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

Filters

The four building blocks of financial analysis are (1),(2),(3) and (4).

A business segment is a part of a company that is separated by its (1) or (2).