Question 1

Accounts receivable turnover is calculated by dividing ________________________________________ by average net accounts receivable.

Accepted Answer

net sales

Question 2

Ramos Company
Ramos Company included the following information in its annual report:
  
-Refer to the information for Ramos Company.In a percentage change income statement over the period of 2009 to 2011,what is the change in net income?

Accepted Answer

A)  100% 
B)  21.6% 
C)  72.4% 
D)  27.6% 
A)  100% 
B)  21.6% 
C)  72.4% 
D)  27.6%

Question 3

When calculating the return on fixed assets sales is divided by _________________

Accepted Answer

Average fi

Question 4

________________________________________ is the level of earnings and the growth in the levels of earnings expected to persist in the future.

Accepted Answer

Sustainabl

Question 5

Which factor does not explain differences or changes in ROA?

Accepted Answer

A)  Operating leverage 
B)  Cyclicality of sales 
C)  Product life cycle 
D)  Financial leverage 
A)  Operating leverage 
B)  Cyclicality of sales 
C)  Product life cycle 
D)  Financial leverage

Question 6

Which of the following industries would you expect to have,on average,high asset turnover and low profit margin?

Accepted Answer

A)  Hotels 
B)  Grocery stores 
C)  Utilities 
D)  Oil and Gas extraction 
A)  Hotels 
B)  Grocery stores 
C)  Utilities 
D)  Oil and Gas extraction

Question 7

Adjustments for dilutive securities and the adjustment to weighted average number of shares outstanding presumes that the dilutive securities are converted to common shares:

Accepted Answer

A)  as of the beginning of the year. 
B)  as of the end of the year. 
C)  as of the middle of the year. 
D)  as of the point in time where the maximum number of shares are outstanding. 
A)  as of the beginning of the year. 
B)  as of the end of the year. 
C)  as of the middle of the year. 
D)  as of the point in time where the maximum number of shares are outstanding.

Question 8

Common-size analysis requires the analyst to be aware that percentages can change because of all of the following except:

Accepted Answer

A)  changes in expenses in the numerator independent of changes in sales 
B)  changes in sales independent of changes in expenses 
C)  interaction effects between the numerator and denominator 
D)  All of these are possible explanations. 
A)  changes in expenses in the numerator independent of changes in sales 
B)  changes in sales independent of changes in expenses 
C)  interaction effects between the numerator and denominator 
D)  All of these are possible explanations.

Question 9

Return on assets can be a misleading ratio when analyzing technology firms because two important assets,______________________________ and ______________________________ do not appear on their balance sheets

Accepted Answer

their empl

Question 10

EPS is an ambiguous measure of profitability because it reflects operating performance in the numerator and ________________________________________ in the denominator.

Accepted Answer

The answer of EPS is an ambiguous measure of profitability...

Question 11

Economic theory suggests that higher levels of ____________________ in any activity should lead to higher levels of ___________________________________.

Accepted Answer

risk,expec

Question 12

Orca Industries
Below are the two most recent balance sheets and most recent income statement for Orca Industries.The company has an effective tax rate of 35%.   Income Statement
For the year ended December 31,2011  
-Refer to the information for Orca Industries.Orca's basic earnings per share is:

Accepted Answer

A)  .22 
B)  .13 
C)  .25 
D)  .30 
A)  .22 
B)  .13 
C)  .25 
D)  .30

Question 13

The ___________________________________ of interest expense on net income equals one minus the marginal tax rate times interest expense.

Accepted Answer

The answer of The ___________________________________ of interest expense on net...

Question 14

The rationale for adding back the _______________________________________________________ relates to attaining consistency in the numerator and denominator of ROA.

Accepted Answer

minority i

Question 15

When an analyst uses measures of past profitability to forecast the firm's future profitability the expectation is that those revenues,gains,expenses and losses will ____________________.

Accepted Answer

The answer of When an analyst uses measures of past...

Question 16

Return on assets will likely differ across firms and across time.Three elements of risk that will help explain these differences are ________________________________________,cyclicality of sales and stage and length of product life cycle.

Accepted Answer

The answer of Return on assets will likely differ across...

Question 17

Orca Industries
Below are the two most recent balance sheets and most recent income statement for Orca Industries.The company has an effective tax rate of 35%.   Income Statement
For the year ended December 31,2011  
-Refer to the information for Orca Industries.The return on assets for Orca Industries is:

Accepted Answer

A)  6.8% 
B)  13.5% 
C)  10% 
D)  12.3% 
A)  6.8% 
B)  13.5% 
C)  10% 
D)  12.3%

Question 18

When calculating Basic earnings per share net income is adjusted by____________

Accepted Answer

The answer of When calculating Basic earnings per share net...

Question 19

Extreme Sports Company and All Sports Corporation
Below is financial information for two sporting goods retailers.Extreme Sports Company operates a retail business and franchising business.At the end 2011,Extreme Sports had 263 Company-owned and 120 franchise-operated retail stores.Extreme's stores are located in suburban,strip mall and regional mall locations,the company operates in 32 states.All Sports Corporation sells sporting goods and related products at over 2,500 Company-operated retail stores.
Selected Data for All Sports and Extreme Sports
(amounts in millions)
  
-Refer to the information for Extreme Sports Company and All Sports Corporation. Compute the Asset Turnover for All Sports.

Accepted Answer

A)  3.2% 
B)  2.15 
C)  8.9% 
D)  1.1% 
A)  3.2% 
B)  2.15 
C)  8.9% 
D)  1.1%

Question 20

Firms and industries characterized by heavy fixed capacity costs and lengthy periods required to add new capacity operate under a(n)___________________________________.

Accepted Answer

The answer of Firms and industries characterized by heavy fixed...

Accounts receivable turnover is calculated by dividing ________________________________________ by average net accounts receivable.

Ramos Company Ramos Company included the following information in its annual report: -Refer to the information for Ramos Company.In a percentage change income statement over the period of 2009 to 2011,what is the change in net income?

When calculating the return on fixed assets sales is divided by _________________

________________________________________ is the level of earnings and the growth in the levels of earnings expected to persist in the future.

Which factor does not explain differences or changes in ROA?

Which of the following industries would you expect to have,on average,high asset turnover and low profit margin?

Adjustments for dilutive securities and the adjustment to weighted average number of shares outstanding presumes that the dilutive securities are converted to common shares:

Common-size analysis requires the analyst to be aware that percentages can change because of all of the following except:

Return on assets can be a misleading ratio when analyzing technology firms because two important assets, and do not appear on their balance sheets

EPS is an ambiguous measure of profitability because it reflects operating performance in the numerator and ________________________________________ in the denominator.

Economic theory suggests that higher levels of in any activity should lead to higher levels of _______________.

Orca Industries Below are the two most recent balance sheets and most recent income statement for Orca Industries.The company has an effective tax rate of 35%. Income Statement For the year ended December 31,2011 -Refer to the information for Orca Industries.Orca's basic earnings per share is:

The ___________________________________ of interest expense on net income equals one minus the marginal tax rate times interest expense.

The rationale for adding back the _______________________________________________________ relates to attaining consistency in the numerator and denominator of ROA.

When an analyst uses measures of past profitability to forecast the firm's future profitability the expectation is that those revenues,gains,expenses and losses will ____________________.

Return on assets will likely differ across firms and across time.Three elements of risk that will help explain these differences are ________________________________________,cyclicality of sales and stage and length of product life cycle.

When calculating Basic earnings per share net income is adjusted by____________

Firms and industries characterized by heavy fixed capacity costs and lengthy periods required to add new capacity operate under a(n)___________________________________.

Overview of Financial Reporting,financial Statement Analysis,and Valuation

Asset and Liability Valuation and Income Recognition

Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

Risk Analysis

Accounting Quality

Financing Activities

Investing Activities

Operating Activities

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

Filters

Exam 4: Profitability Analysis

Accounts receivable turnover is calculated by dividing ________________________________________ by average net accounts receivable.

Ramos Company Ramos Company included the following information in its annual report: -Refer to the information for Ramos Company.In a percentage change income statement over the period of 2009 to 2011,what is the change in net income?

When calculating the return on fixed assets sales is divided by _________________

________________________________________ is the level of earnings and the growth in the levels of earnings expected to persist in the future.

Which factor does not explain differences or changes in ROA?

Which of the following industries would you expect to have,on average,high asset turnover and low profit margin?

Adjustments for dilutive securities and the adjustment to weighted average number of shares outstanding presumes that the dilutive securities are converted to common shares:

Common-size analysis requires the analyst to be aware that percentages can change because of all of the following except:

Return on assets can be a misleading ratio when analyzing technology firms because two important assets,______________________________ and ______________________________ do not appear on their balance sheets

EPS is an ambiguous measure of profitability because it reflects operating performance in the numerator and ________________________________________ in the denominator.

Economic theory suggests that higher levels of ____________________ in any activity should lead to higher levels of ___________________________________.

Orca Industries Below are the two most recent balance sheets and most recent income statement for Orca Industries.The company has an effective tax rate of 35%. Income Statement For the year ended December 31,2011 -Refer to the information for Orca Industries.Orca's basic earnings per share is:

The ___________________________________ of interest expense on net income equals one minus the marginal tax rate times interest expense.

The rationale for adding back the _______________________________________________________ relates to attaining consistency in the numerator and denominator of ROA.

When an analyst uses measures of past profitability to forecast the firm's future profitability the expectation is that those revenues,gains,expenses and losses will ____________________.

Return on assets will likely differ across firms and across time.Three elements of risk that will help explain these differences are ________________________________________,cyclicality of sales and stage and length of product life cycle.

When calculating Basic earnings per share net income is adjusted by____________

Firms and industries characterized by heavy fixed capacity costs and lengthy periods required to add new capacity operate under a(n)___________________________________.

Overview of Financial Reporting,financial Statement Analysis,and Valuation

Asset and Liability Valuation and Income Recognition

Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

Risk Analysis

Accounting Quality

Financing Activities

Investing Activities

Operating Activities

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

Filters

Return on assets can be a misleading ratio when analyzing technology firms because two important assets, and do not appear on their balance sheets

Economic theory suggests that higher levels of in any activity should lead to higher levels of _______________.