Question 1

The calculation of free cash flow contains a deduction for

Accepted Answer

A) interest expense. 
B) depreciation. 
C) net capital expenditures. 
D) net cash flows from operating activities. 
A) interest expense. 
B) depreciation. 
C) net capital expenditures. 
D) net cash flows from operating activities.

Question 2

Which of the following must be reported by diversified companies for each of their operating segments?

Accepted Answer

A) Segment profit or loss,expenses,and earnings per share 
B) Segment profit or loss,certain revenue and expense items,and segment assets 
C) Assets,liabilities,and earnings per share 
D) Segment profit or loss,expenses,and unidentifiable assets 
A) Segment profit or loss,expenses,and earnings per share 
B) Segment profit or loss,certain revenue and expense items,and segment assets 
C) Assets,liabilities,and earnings per share 
D) Segment profit or loss,expenses,and unidentifiable assets

Question 3

It is in the best interests of a company to base executive compensation on multiple performance measures.

Accepted Answer

A) True 
 B)False

Question 4

Cash flows to sales and cash flows to assets are measured in terms of

Accepted Answer

A) times. 
B) a percentage. 
C) dollars. 
D) days. 
A) times. 
B) a percentage. 
C) dollars. 
D) days.

Question 5

Rule-of-thumb measures are the most precise and best standards of comparison in financial performance evaluation.

Accepted Answer

A) True 
 B)False

Question 6

Prepare a trend analysis of the following data,using 20x4 as the base year.Place your answers in the chart provided.Comment on the trend.

Accepted Answer

The answer of Prepare a trend analysis of the following...

Question 7

Which of the following is the least useful in evaluating a relationship as either favorable or unfavorable?

Accepted Answer

A) Past and current performances of the company 
B) Industry averages 
C) Past performance of the company 
D) Rule-of-thumb measures 
A) Past and current performances of the company 
B) Industry averages 
C) Past performance of the company 
D) Rule-of-thumb measures

Question 8

Using the following information from an annual report,prepare a vertical analysis of the consolidated statement of earnings for the fiscal year ended June 30,20x5.(Round percentage answers to one decimal place. )

Accepted Answer

@#IMG-DLM&*Rounding has caused

Question 9

Following are the financial statements for Flynn Corporation for the year ended December 31,20x5.Assume that all balance sheet amounts represent both average and ending figures.  
  
-What is the profit margin for this corporation? Round your answer to one decimal place.

Accepted Answer

A) 22.5 percent 
B) 30.0 percent 
C) 40.0 percent 
D) 53.3 percent 
A) 22.5 percent 
B) 30.0 percent 
C) 40.0 percent 
D) 53.3 percent

Question 10

A write-down of assets which results in a decrease in earnings may indicate that earnings will be poor in the future.

Accepted Answer

A) True 
 B)False

Question 11

Use the following information to calculate the ratios requested below.Round answers to two decimal places.Show your work.

Accepted Answer

The answer of Use the following information to calculate the...

Question 12

The ability to pay bills when due and to meet unexpected needs for cash most closely describes

Accepted Answer

A) cash flow adequacy. 
B) long-term solvency. 
C) liquidity. 
D) profitability. 
A) cash flow adequacy. 
B) long-term solvency. 
C) liquidity. 
D) profitability.

Question 13

A a rule of thumb,a business starts to have trouble when its current liabilities to net worth ratio exceeds 50%.

Accepted Answer

A) True 
 B)False

Question 14

Both diversified companies and conglomerates operate in a single,well-defined industry.

Accepted Answer

A) True 
 B)False

Question 15

Horizontal analysis will result in common-size statements.

Accepted Answer

A) True 
 B)False

Question 16

Financial statement analysis is used to show how items in a company's financial statements relate to the company's financial performance objectives.

Accepted Answer

A) True 
 B)False

Question 17

The analysis of risk and return is important to both investors and creditors.

Accepted Answer

A) True 
 B)False

Question 18

A general rule in choosing among alternative investments is the greater the risk taken,the

Accepted Answer

A) greater the return required. 
B) lower the potential expected. 
C) greater the price of the investment. 
D) lower the profits expected. 
A) greater the return required. 
B) lower the potential expected. 
C) greater the price of the investment. 
D) lower the profits expected.

Question 19

Vertical analysis is the same as trend analysis.

Accepted Answer

A) True 
 B)False

Question 20

A company with a current ratio of 2.4 times will see that ratio decrease when the company

Accepted Answer

A) pays a large current liability. 
B) declares a 10 percent stock dividend on its common stock. 
C) borrows cash by issuing a short-term note payable. 
D) converts a short-term liability to a long-term liability. 
A) pays a large current liability. 
B) declares a 10 percent stock dividend on its common stock. 
C) borrows cash by issuing a short-term note payable. 
D) converts a short-term liability to a long-term liability.

Exam 16: Financial Statement Analysis

The calculation of free cash flow contains a deduction for

Which of the following must be reported by diversified companies for each of their operating segments?

It is in the best interests of a company to base executive compensation on multiple performance measures.

Cash flows to sales and cash flows to assets are measured in terms of

Rule-of-thumb measures are the most precise and best standards of comparison in financial performance evaluation.

Prepare a trend analysis of the following data,using 20x4 as the base year.Place your answers in the chart provided.Comment on the trend.

Which of the following is the least useful in evaluating a relationship as either favorable or unfavorable?

Using the following information from an annual report,prepare a vertical analysis of the consolidated statement of earnings for the fiscal year ended June 30,20x5.(Round percentage answers to one decimal place. )

Following are the financial statements for Flynn Corporation for the year ended December 31,20x5.Assume that all balance sheet amounts represent both average and ending figures. -What is the profit margin for this corporation? Round your answer to one decimal place.

A write-down of assets which results in a decrease in earnings may indicate that earnings will be poor in the future.

Use the following information to calculate the ratios requested below.Round answers to two decimal places.Show your work.

The ability to pay bills when due and to meet unexpected needs for cash most closely describes

A a rule of thumb,a business starts to have trouble when its current liabilities to net worth ratio exceeds 50%.

Both diversified companies and conglomerates operate in a single,well-defined industry.

Horizontal analysis will result in common-size statements.

Financial statement analysis is used to show how items in a company's financial statements relate to the company's financial performance objectives.

The analysis of risk and return is important to both investors and creditors.

A general rule in choosing among alternative investments is the greater the risk taken,the

Vertical analysis is the same as trend analysis.

A company with a current ratio of 2.4 times will see that ratio decrease when the company

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis and Capital Budgeting

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