Question 1

Horizontal analysis of comparative financial statements includes

Accepted Answer

A)  development of common-sized statements 
B)  calculation of liquidity ratios 
C)  calculation of dollar amount changes and percentage changes from the previous to the current year 
D)  evaluation of each component in a financial statement to a total within the statement 
A)  development of common-sized statements 
B)  calculation of liquidity ratios 
C)  calculation of dollar amount changes and percentage changes from the previous to the current year 
D)  evaluation of each component in a financial statement to a total within the statement

Question 2

The following data are taken from the financial statements:
​
​
   Determine for the current year the (a)return on total assets,(b)return on stockholders' equity,(c)return on common stockholders' equity,(d)earnings per share on common stock,(e)price-earnings ratio on common stock,and (f)dividend yield.The current market price per share of common stock is $25.
Round dollar values to two decimal places and other final answers to one decimal place.

Accepted Answer

(a) @#IMG-DLM& (b) @#IMG-DLM&

Question 3

Which of the following would appear as an unusual item on the income statement?

Accepted Answer

A)  loss resulting from the sale of fixed assets 
B)  gain resulting from the disposal of a segment of the business 
C)  presentation of earnings per share 
D)  stock split 
A)  loss resulting from the sale of fixed assets 
B)  gain resulting from the disposal of a segment of the business 
C)  presentation of earnings per share 
D)  stock split

Question 4

A company with $70,000 in current assets and $50,000 in current liabilities pays a $1,000 current liability.As a result of this transaction,the current ratio and working capital will

Accepted Answer

A)  both decrease 
B)  both increase 
C)  increase and remain the same,respectively 
D)  remain the same and decrease,respectively 
A)  both decrease 
B)  both increase 
C)  increase and remain the same,respectively 
D)  remain the same and decrease,respectively

Question 5

Zeus Company reports the following for the current year:
​
*Net of any tax effect
   ​

Accepted Answer

The answer of Zeus Company reports the following for the...

Question 6

When the return on total assets is greater than the return on common stockholders' equity,the management of the company has effectively used leverage.

Accepted Answer

A) True 
 B)False

Question 7

A balance sheet that displays only component percentages is a

Accepted Answer

A)  trend balance sheet 
B)  comparative balance sheet 
C)  condensed balance sheet 
D)  common-sized balance sheet 
A)  trend balance sheet 
B)  comparative balance sheet 
C)  condensed balance sheet 
D)  common-sized balance sheet

Question 8

A loss on disposal of a segment would be reported in the income statement as a(n)

Accepted Answer

A)  administrative expense 
B)  other expense 
C)  deduction from income from continuing operations 
D)  selling expense 
A)  administrative expense 
B)  other expense 
C)  deduction from income from continuing operations 
D)  selling expense

Question 9

A company reports the following:
​
   Determine the (a)return on stockholders' equity,and (b)return on common stockholders' equity.Round your answer to one decimal place.

Accepted Answer

The answer of A company reports the following:
​
  ...

Question 10

What is the asset turnover for Diane Company?

Accepted Answer

A)  1.00 
B)  2.94 
C)  0.18 
D)  0.34 
A)  1.00 
B)  2.94 
C)  0.18 
D)  0.34

Question 11

Which of the following is not a characteristic evaluated in ratio analysis?

Accepted Answer

A)  liquidity 
B)  profitability 
C)  solvency 
D)  marketability 
A)  liquidity 
B)  profitability 
C)  solvency 
D)  marketability

Question 12

The denominator of the return on total assets ratio is the average total assets.

Accepted Answer

A) True 
 B)False

Question 13

The following items were taken from the financial statements of Tilden,Inc.,over a three-year period:
​
​
   Compute the following for each of the items listed.
​
Round percentages to one decimal place.

Accepted Answer

The answer of The following items were taken from the...

Question 14

A company reports the following income statement and balance sheet information for the current year:
​
   Determine the return on total assets.Round your answer to one decimal place.

Accepted Answer

Return on total assets = (Net income + I

Question 15

A company reports the following:
​
   Calculate the company's earnings per share on common stock.

Accepted Answer

The answer of A company reports the following:
​
  ...

Question 16

Which of the following is not included in the computation of the quick ratio?

Accepted Answer

A)  inventory 
B)  marketable securities 
C)  accounts receivable 
D)  cash 
A)  inventory 
B)  marketable securities 
C)  accounts receivable 
D)  cash

Question 17

The following information pertains to Dallas Company.Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Assets
Liabilities and Stockholders' Equity
    Income Statement
  ​
  What is the return on stockholders' equity?

Accepted Answer

A)  7.3% 
B)  13.6% 
C)  20.5% 
D)  40.9% 
A)  7.3% 
B)  13.6% 
C)  20.5% 
D)  40.9%

Question 18

If two companies have the same current ratio,their ability to pay short-term debt is the same.

Accepted Answer

A) True 
 B)False

Question 19

The dividend yield is equal to the dividends per share divided by the par value per share of common stock.

Accepted Answer

A) True 
 B)False

Question 20

Match each ratio that follows to its use (items a-h).Items may be used more than once.
-price-earnings (P / E)ratio

Accepted Answer

A) assess the profitability of the assets 
B) assess how effectively assets are used 
C) indicate the ability to pay current liabilities 
D) indicate how much of the company is financed by debt and equity 
E) indicate instant debt-paying ability
F)assess the profitability of the investment by common stockholders
G)indicate future earnings prospects
H)indicate the extent to which earnings are being distributed to common stockholders
   
A) assess the profitability of the assets 
B) assess how effectively assets are used 
C) indicate the ability to pay current liabilities 
D) indicate how much of the company is financed by debt and equity 
E) indicate instant debt-paying ability
F)assess the profitability of the investment by common stockholders
G)indicate future earnings prospects
H)indicate the extent to which earnings are being distributed to common stockholders

Exam 14: Financial Statement Analysis

Horizontal analysis of comparative financial statements includes

Which of the following would appear as an unusual item on the income statement?

A company with $70,000 in current assets and $50,000 in current liabilities pays a $1,000 current liability.As a result of this transaction,the current ratio and working capital will

Zeus Company reports the following for the current year: ​ *Net of any tax effect ​

When the return on total assets is greater than the return on common stockholders' equity,the management of the company has effectively used leverage.

A balance sheet that displays only component percentages is a

A loss on disposal of a segment would be reported in the income statement as a(n)

A company reports the following: ​ Determine the (a)return on stockholders' equity,and (b)return on common stockholders' equity.Round your answer to one decimal place.

What is the asset turnover for Diane Company?

Which of the following is not a characteristic evaluated in ratio analysis?

The denominator of the return on total assets ratio is the average total assets.

The following items were taken from the financial statements of Tilden,Inc.,over a three-year period: ​ ​ Compute the following for each of the items listed. ​ Round percentages to one decimal place.

A company reports the following income statement and balance sheet information for the current year: ​ Determine the return on total assets.Round your answer to one decimal place.

A company reports the following: ​ Calculate the company's earnings per share on common stock.

Which of the following is not included in the computation of the quick ratio?

The following information pertains to Dallas Company.Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Assets Liabilities and Stockholders' Equity Income Statement ​ What is the return on stockholders' equity?

If two companies have the same current ratio,their ability to pay short-term debt is the same.

The dividend yield is equal to the dividends per share divided by the par value per share of common stock.

Match each ratio that follows to its use (items a-h).Items may be used more than once. -price-earnings (P / E)ratio

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current,installment Notes,and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, stock Transactions, and Dividends

Statement of Cash Flows

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Filters

Zeus Company reports the following for the current year: *Net of any tax effect

A company reports the following: Determine the (a)return on stockholders' equity,and (b)return on common stockholders' equity.Round your answer to one decimal place.

The following items were taken from the financial statements of Tilden,Inc.,over a three-year period: Compute the following for each of the items listed. Round percentages to one decimal place.

A company reports the following income statement and balance sheet information for the current year: Determine the return on total assets.Round your answer to one decimal place.

A company reports the following: Calculate the company's earnings per share on common stock.

The following information pertains to Dallas Company.Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Assets Liabilities and Stockholders' Equity Income Statement What is the return on stockholders' equity?