Question 1

Which of the following is true of horizontal analysis?

Accepted Answer

A)  The percentages of change can be added or subtracted from top to bottom. 
B)  The current year is always the base year. 
C)  The amounts of increase or decrease can be added or subtracted in the column from top to bottom and will give correct subtotals at each point. 
D)  The amounts and percentages of increase or decrease can be added and subtracted vertically in a column. 
A)  The percentages of change can be added or subtracted from top to bottom. 
B)  The current year is always the base year. 
C)  The amounts of increase or decrease can be added or subtracted in the column from top to bottom and will give correct subtotals at each point. 
D)  The amounts and percentages of increase or decrease can be added and subtracted vertically in a column.

Question 2

Which of the following is most likely to indicate that a firm is experiencing difficulty in collecting its receivables?

Accepted Answer

A)  Its accounts receivable turnover decreases from 10 to 8. 
B)  Its accounts receivable turnover increases from 8 to 10. 
C)  Its average collection period decreases from 36 to 32. 
D)  Its average collection period increases from 25 to 28. 
A)  Its accounts receivable turnover decreases from 10 to 8. 
B)  Its accounts receivable turnover increases from 8 to 10. 
C)  Its average collection period decreases from 36 to 32. 
D)  Its average collection period increases from 25 to 28.

Question 3

If the gross profit on sales is 20 percent of net sales, then cost of goods sold must be ____________________ percent of net sales.

Accepted Answer

The answer of If the gross profit on sales is...

Question 4

Differentiate between horizontal analysis and trend analysis. What does each reveal about the company being analyzed?

Accepted Answer

Answers may vary from student to student

Question 5

The fair market value of a share of common stock is determined by dividing the stockholders' equity by the number of shares of common stock outstanding.

Accepted Answer

A) True 
 B)False

Question 6

-Using the comparative balance sheet assets given below, prepare a horizontal analysis of all asset items. Carry all calculations to two decimal places and then round to one decimal place.

Accepted Answer

The answer of  
-Using the comparative balance sheet assets...

Question 7

If current assets are $90,000 and total assets are $270,000, what percentage of total assets are current assets?

Accepted Answer

A)  3.5 percent 
B)  30 percent 
C)  25 percent 
D)  33 percent 
A)  3.5 percent 
B)  30 percent 
C)  25 percent 
D)  33 percent

Question 8

-Using the information shown, prepare a vertical analysis. Carry all calculations to two decimal places and then round to one decimal place.

Accepted Answer

The answer of  
-Using the information shown, prepare a...

Question 9

Trend analysis looks at

Accepted Answer

A)  selected ratios over a period of time. 
B)  two years of information for comparison. 
C)  two or more companies for comparison. 
D)  profitability by industry. 
A)  selected ratios over a period of time. 
B)  two years of information for comparison. 
C)  two or more companies for comparison. 
D)  profitability by industry.

Question 10

The current ratio is a measure of profitability.

Accepted Answer

A) True 
 B)False

Question 11

The price-earnings ratio is computed by dividing the current market value per share by the ____________________ per share.

Accepted Answer

The answer of The price-earnings ratio is computed by dividing...

Question 12

A firm had current liabilities of $60,000 on December 31, 2012, and $51,000 on December 31, 2013. Current liabilities decreased by ____________________ percent.

Accepted Answer

The answer of A firm had current liabilities of $60,000...

Question 13

Comparison of amounts and percentages for only two years is adequate to indicate long-term trends.

Accepted Answer

A) True 
 B)False

Question 14

Selected financial ratios are given for Canard Industries and Canaille Manufacturing. Both firms have come to your bank and requested loans. You are a loan officer at Noir Bank but can only loan funds to one of the firms. Make your decision based on the information provided. In a short paragraph, explain the basis for the selection you made.

Accepted Answer

Student answers will vary. They should t

Question 15

-Using the information given below, calculate the gross profit percentage based on net sales. What conclusions can be made about this company based on this trend analysis?

Accepted Answer

@#IMG-DLM& Management has been able to increase sa

Question 16

If total merchandise available for sale is 72 percent of net sales and cost of goods sold is 64 percent of net sales, gross profit on sales is

Accepted Answer

A)  8 percent of net sales. 
B)  36 percent of net sales. 
C)  28 percent of net sales. 
D)  20 percent of net sales. 
A)  8 percent of net sales. 
B)  36 percent of net sales. 
C)  28 percent of net sales. 
D)  20 percent of net sales.

Question 17

A firm reported total liabilities of $60,000 and total stockholders' equity of $140,000. The amount of total liabilities is ____________________ percent of total assets.

Accepted Answer

The answer of A firm reported total liabilities of $60,000...

Question 18

Most trade associations provide common-size statements based on data gathered from member companies.

Accepted Answer

A) True 
 B)False

Question 19

The comparison of dollar amounts or percentages over several periods is called ____________________ analysis.

Accepted Answer

The answer of The comparison of dollar amounts or percentages...

Question 20

-Using the information given, analyze the financial strength of Sybaritic Corporation for 2013.

Accepted Answer

Number of times bond interest earned = 1

Which of the following is true of horizontal analysis?

Which of the following is most likely to indicate that a firm is experiencing difficulty in collecting its receivables?

If the gross profit on sales is 20 percent of net sales, then cost of goods sold must be ____________________ percent of net sales.

Differentiate between horizontal analysis and trend analysis. What does each reveal about the company being analyzed?

The fair market value of a share of common stock is determined by dividing the stockholders' equity by the number of shares of common stock outstanding.

-Using the comparative balance sheet assets given below, prepare a horizontal analysis of all asset items. Carry all calculations to two decimal places and then round to one decimal place.

If current assets are $90,000 and total assets are $270,000, what percentage of total assets are current assets?

-Using the information shown, prepare a vertical analysis. Carry all calculations to two decimal places and then round to one decimal place.

Trend analysis looks at

The current ratio is a measure of profitability.

The price-earnings ratio is computed by dividing the current market value per share by the ____________________ per share.

A firm had current liabilities of $60,000 on December 31, 2012, and $51,000 on December 31, 2013. Current liabilities decreased by ____________________ percent.

Comparison of amounts and percentages for only two years is adequate to indicate long-term trends.

-Using the information given below, calculate the gross profit percentage based on net sales. What conclusions can be made about this company based on this trend analysis?

If total merchandise available for sale is 72 percent of net sales and cost of goods sold is 64 percent of net sales, gross profit on sales is

A firm reported total liabilities of $60,000 and total stockholders' equity of $140,000. The amount of total liabilities is ____________________ percent of total assets.

Most trade associations provide common-size statements based on data gathered from member companies.

The comparison of dollar amounts or percentages over several periods is called ____________________ analysis.

-Using the information given, analyze the financial strength of Sybaritic Corporation for 2013.

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporations: Formation and Capital Stock Transactions

Corporate Earnings and Capital Transactions

Long-Term Bonds

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

Cost-Revenue Analysis for Decision Making

Filters

Exam 23: Financial Statement Analysis

Which of the following is true of horizontal analysis?

Which of the following is most likely to indicate that a firm is experiencing difficulty in collecting its receivables?

If the gross profit on sales is 20 percent of net sales, then cost of goods sold must be ____________________ percent of net sales.

Differentiate between horizontal analysis and trend analysis. What does each reveal about the company being analyzed?

The fair market value of a share of common stock is determined by dividing the stockholders' equity by the number of shares of common stock outstanding.

-Using the comparative balance sheet assets given below, prepare a horizontal analysis of all asset items. Carry all calculations to two decimal places and then round to one decimal place.

If current assets are $90,000 and total assets are $270,000, what percentage of total assets are current assets?

-Using the information shown, prepare a vertical analysis. Carry all calculations to two decimal places and then round to one decimal place.

Trend analysis looks at

The current ratio is a measure of profitability.

The price-earnings ratio is computed by dividing the current market value per share by the ____________________ per share.

A firm had current liabilities of $60,000 on December 31, 2012, and $51,000 on December 31, 2013. Current liabilities decreased by ____________________ percent.

Comparison of amounts and percentages for only two years is adequate to indicate long-term trends.

-Using the information given below, calculate the gross profit percentage based on net sales. What conclusions can be made about this company based on this trend analysis?

If total merchandise available for sale is 72 percent of net sales and cost of goods sold is 64 percent of net sales, gross profit on sales is

A firm reported total liabilities of $60,000 and total stockholders' equity of $140,000. The amount of total liabilities is ____________________ percent of total assets.

Most trade associations provide common-size statements based on data gathered from member companies.

The comparison of dollar amounts or percentages over several periods is called ____________________ analysis.

-Using the information given, analyze the financial strength of Sybaritic Corporation for 2013.

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporations: Formation and Capital Stock Transactions

Corporate Earnings and Capital Transactions

Long-Term Bonds

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

Cost-Revenue Analysis for Decision Making

Filters