Question 1

Which of the following considerations is most important for a stockholder when evaluating whether to purchase stock in a company?

Accepted Answer

A) Will earnings per share be distributed to stockholders? 
B) Will the company earn a fair return on the amount invested by the stockholders? 
C) Will the key ratios be reported on the balance sheet? 
D) Will cash flows from operations exceed the amount of net income for the period? 
A) Will earnings per share be distributed to stockholders? 
B) Will the company earn a fair return on the amount invested by the stockholders? 
C) Will the key ratios be reported on the balance sheet? 
D) Will cash flows from operations exceed the amount of net income for the period? B

Question 2

Earnings per share is an indication of how much

Accepted Answer

A) the company paid as dividends for each share of stock held by stockholders. 
B) the company earned for each share of outstanding common and preferred stock. 
C) the company earned for each share of outstanding common stock. 
D) cash the company has for each share of all outstanding stock. 
A) the company paid as dividends for each share of stock held by stockholders. 
B) the company earned for each share of outstanding common and preferred stock. 
C) the company earned for each share of outstanding common stock. 
D) cash the company has for each share of all outstanding stock. C

Question 3

The operating cycle of a manufacturer is the length of time between the

Accepted Answer

A) purchase of raw materials and the sale of the goods. 
B) sale of the goods and the collection of any outstanding receivables from the sale of the product 
C) purchase of raw materials and collection of any outstanding receivables from the sale of the product. 
D) purchase of raw materials and the production of goods. 
A) purchase of raw materials and the sale of the goods. 
B) sale of the goods and the collection of any outstanding receivables from the sale of the product 
C) purchase of raw materials and collection of any outstanding receivables from the sale of the product. 
D) purchase of raw materials and the production of goods. C

Question 4

Which of the following is a measure of the time that it takes to convert current assets into cash?

Accepted Answer

A) accounts receivable turnover ratio 
B) cash to cash operating cycle 
C) number of days' sales in inventory 
D) working capital 
A) accounts receivable turnover ratio 
B) cash to cash operating cycle 
C) number of days' sales in inventory 
D) working capital

Question 5

Presented below are selected data from the financial statements of Wizard Corp.   Earnings per share is reported on the 2012 income statement as

Accepted Answer

A) $1.08 
B) $1.20 
C) $1.29 
D) $1.43 
A) $1.08 
B) $1.20 
C) $1.29 
D) $1.43

Question 6

One measure of a company's overall long-term financial health is the debt-to-equity ratio.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true concerning discontinued operations?

Accepted Answer

A) Only the gain or loss is reported on the income statement. 
B) It must be both unusual in nature and infrequent in occurrence. 
C) Analysts would not normally include this item in making their decisions. 
D) Net income or loss from prior years must also be disclosed in the year of disposition. 
A) Only the gain or loss is reported on the income statement. 
B) It must be both unusual in nature and infrequent in occurrence. 
C) Analysts would not normally include this item in making their decisions. 
D) Net income or loss from prior years must also be disclosed in the year of disposition.

Question 8

Computech Industries Below is financial data for Computech Industries' current year.
  Refer to the data for Computech Industries.
Based on this information,what is Computech's number of days' sales in inventory (assuming a 360 day year)?

Accepted Answer

A) 132 days 
B) 216 days 
C) 1,091 days 
D) 120 days 
A) 132 days 
B) 216 days 
C) 1,091 days 
D) 120 days

Question 9

Which profitability ratio requires the use of earnings per share and the current market price?

Accepted Answer

A) Return on common stockholders' equity 
B) Dividend payout ratio 
C) Dividend yield ratio 
D) Price/earnings ratio 
A) Return on common stockholders' equity 
B) Dividend payout ratio 
C) Dividend yield ratio 
D) Price/earnings ratio

Question 10

Presented below are selected data from the financial statements of Parade Corp.   The price/earnings ratio for 2012 is

Accepted Answer

A) .80 to 1 
B) 1.43 to 1 
C) 8.39 to 1 
D) 12.50 to 1 
A) .80 to 1 
B) 1.43 to 1 
C) 8.39 to 1 
D) 12.50 to 1

Question 11

The profit margin ratio reflects the amount of income for each dollar of sales.

Accepted Answer

A) True 
 B)False

Question 12

Pinecrest Company Use the selected data from Pinecrest Company's financial statements to answer the following question.
  Refer to the data for Pinecrest Company.
The current ratio for 2014 is

Accepted Answer

A) 0.60 to 1 
B) 0.99 to 1 
C) 1.34 to 1 
D) 1.68 to 1 
A) 0.60 to 1 
B) 0.99 to 1 
C) 1.34 to 1 
D) 1.68 to 1

Question 13

Which of the following statements is true regarding vertical analysis?

Accepted Answer

A) Common-size financial statements can be used to compare businesses of different sizes. 
B) Vertical analysis can only be used with balance sheet accounts. 
C) Vertical analysis can only be used with income statement accounts. 
D) Vertical analysis can only be used with retained earnings accounts. 
A) Common-size financial statements can be used to compare businesses of different sizes. 
B) Vertical analysis can only be used with balance sheet accounts. 
C) Vertical analysis can only be used with income statement accounts. 
D) Vertical analysis can only be used with retained earnings accounts.

Question 14

Which of the following is an example of liquidity analysis?

Accepted Answer

A) Bonds payable are divided by total liabilities and stockholders' equity. 
B) Net income is divided by total assets. 
C) Net income is divided by the number of shares of stock outstanding 
D) Current assets are divided by current liabilities. 
A) Bonds payable are divided by total liabilities and stockholders' equity. 
B) Net income is divided by total assets. 
C) Net income is divided by the number of shares of stock outstanding 
D) Current assets are divided by current liabilities.

Question 15

Given below is information for Xu Corporation and Yang Computers,Inc.at the end of 2012.

Accepted Answer

The answer of Given below is information for Xu Corporation...

Question 16

You want to know whether selling and administrative expenses were reasonable for the past year,based on the level of sales.The best analysis for obtaining this information is:

Accepted Answer

A) trend analysis 
B) vertical analysis 
C) horizontal analysis 
D) liquidity analysis 
A) trend analysis 
B) vertical analysis 
C) horizontal analysis 
D) liquidity analysis

Question 17

The following information was obtained from the comparative financial statements included in Arco Inc.'s 2012 annual report.(All amounts are in millions of dollars. )
December 31,2012 December 31,2011

Accepted Answer

1.Calculations (all dollar amounts are i

Question 18

Which combination of ratios will best analyze Stetson's income statement performance?

Accepted Answer

A) Earnings per share,gross profit,and profit margin ratio 
B) Gross profit ratio,return on common stockholders' equity ratio,debt-to-equity ratio 
C) Debt-to-equity ratio,gross profit ratio,and profit margin ratio 
D) Current ratio,gross profit ratio,and return on common stockholders' equity ratio 
A) Earnings per share,gross profit,and profit margin ratio 
B) Gross profit ratio,return on common stockholders' equity ratio,debt-to-equity ratio 
C) Debt-to-equity ratio,gross profit ratio,and profit margin ratio 
D) Current ratio,gross profit ratio,and return on common stockholders' equity ratio

Question 19

Which of the following is considered a profitability ratio?

Accepted Answer

A) Earnings per share 
B) Debt-to-equity ratio 
C) Acid-test ratio 
D) Inventory turnover ratio 
A) Earnings per share 
B) Debt-to-equity ratio 
C) Acid-test ratio 
D) Inventory turnover ratio

Question 20

The analysis of common-size statements is called horizontal analysis.

Accepted Answer

A) True 
 B)False

Which of the following considerations is most important for a stockholder when evaluating whether to purchase stock in a company?

Earnings per share is an indication of how much

The operating cycle of a manufacturer is the length of time between the

Which of the following is a measure of the time that it takes to convert current assets into cash?

Presented below are selected data from the financial statements of Wizard Corp. Earnings per share is reported on the 2012 income statement as

One measure of a company's overall long-term financial health is the debt-to-equity ratio.

Which of the following is true concerning discontinued operations?

Computech Industries Below is financial data for Computech Industries' current year. Refer to the data for Computech Industries. Based on this information,what is Computech's number of days' sales in inventory (assuming a 360 day year)?

Which profitability ratio requires the use of earnings per share and the current market price?

Presented below are selected data from the financial statements of Parade Corp. The price/earnings ratio for 2012 is

The profit margin ratio reflects the amount of income for each dollar of sales.

Pinecrest Company Use the selected data from Pinecrest Company's financial statements to answer the following question. Refer to the data for Pinecrest Company. The current ratio for 2014 is

Which of the following statements is true regarding vertical analysis?

Which of the following is an example of liquidity analysis?

Given below is information for Xu Corporation and Yang Computers,Inc.at the end of 2012.

You want to know whether selling and administrative expenses were reasonable for the past year,based on the level of sales.The best analysis for obtaining this information is:

The following information was obtained from the comparative financial statements included in Arco Inc.'s 2012 annual report.(All amounts are in millions of dollars. ) December 31,2012 December 31,2011

Which combination of ratios will best analyze Stetson's income statement performance?

Which of the following is considered a profitability ratio?

The analysis of common-size statements is called horizontal analysis.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, plant, and Equipment, and Intangibles

Current Liabilities, contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

International Financial Reporting Standards

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Exam 13: Financial Statement Analysis

Which of the following considerations is most important for a stockholder when evaluating whether to purchase stock in a company?

Earnings per share is an indication of how much

The operating cycle of a manufacturer is the length of time between the

Which of the following is a measure of the time that it takes to convert current assets into cash?

Presented below are selected data from the financial statements of Wizard Corp. Earnings per share is reported on the 2012 income statement as

One measure of a company's overall long-term financial health is the debt-to-equity ratio.

Which of the following is true concerning discontinued operations?

Computech Industries Below is financial data for Computech Industries' current year. Refer to the data for Computech Industries. Based on this information,what is Computech's number of days' sales in inventory (assuming a 360 day year)?

Which profitability ratio requires the use of earnings per share and the current market price?

Presented below are selected data from the financial statements of Parade Corp. The price/earnings ratio for 2012 is

The profit margin ratio reflects the amount of income for each dollar of sales.

Pinecrest Company Use the selected data from Pinecrest Company's financial statements to answer the following question. Refer to the data for Pinecrest Company. The current ratio for 2014 is

Which of the following statements is true regarding vertical analysis?

Which of the following is an example of liquidity analysis?

Given below is information for Xu Corporation and Yang Computers,Inc.at the end of 2012.

You want to know whether selling and administrative expenses were reasonable for the past year,based on the level of sales.The best analysis for obtaining this information is:

The following information was obtained from the comparative financial statements included in Arco Inc.'s 2012 annual report.(All amounts are in millions of dollars. ) December 31,2012 December 31,2011

Which combination of ratios will best analyze Stetson's income statement performance?

Which of the following is considered a profitability ratio?

The analysis of common-size statements is called horizontal analysis.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, plant, and Equipment, and Intangibles

Current Liabilities, contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

International Financial Reporting Standards

Filters