Question 1

Three of the most common tools of financial analysis are:

Accepted Answer

A)  Financial analysis,ratio analysis,vertical analysis. 
B)  Ratio analysis,horizontal analysis,financial analysis. 
C)  Horizontal analysis,vertical analysis,ratio analysis. 
D)  Horizontal analysis,financial analysis,ratio analysis. 
E)  Vertical analysis,investment analysis,horizontal analysis. 
A)  Financial analysis,ratio analysis,vertical analysis. 
B)  Ratio analysis,horizontal analysis,financial analysis. 
C)  Horizontal analysis,vertical analysis,ratio analysis. 
D)  Horizontal analysis,financial analysis,ratio analysis. 
E)  Vertical analysis,investment analysis,horizontal analysis.

Question 2

Explain the pledged assets to secured liabilities ratio and how it is used in the analysis of a company's financial condition.

Accepted Answer

The pledged assets to secured liabilitie

Question 3

Ratios,like other analytical tools,are usually historically oriented.

Accepted Answer

A) True 
 B)False

Question 4

Bob's Burgers has total assets of $425 million.Its total liabilities are $100 million.Its equity is $285 million.Calculate the debt ratio.

Accepted Answer

A)  35.1% 
B)  23.5% 
C)  38.5% 
D)  28.5% 
E)  58.8% 
A)  35.1% 
B)  23.5% 
C)  38.5% 
D)  28.5% 
E)  58.8%

Question 5

Jolly Co.had net sales of $111,500 and accounts receivable of $12,700.Its days' sales uncollected was:

Accepted Answer

A)  11.7. 
B)  23.3. 
C)  41.6. 
D)  42.5. 
E)  46.6. 
A)  11.7. 
B)  23.3. 
C)  41.6. 
D)  42.5. 
E)  46.6.

Question 6

Secured creditors of a company demand a high ratio of pledged assets to secured liabilities when (1)the values of the assets in liquidation are _______________ and (2)the likelihood of the company to meet its obligation from ___________________ is weak.

Accepted Answer

Low; opera

Question 7

A company should maintain a current ratio of two to one when:

Accepted Answer

A)  Estimating customer demand is difficult. 
B)  The company grants little or no credit. 
C)  The company is selling low priced clothing. 
D)  Inventory turns over frequently. 
E)  The company has little inventory. 
A)  Estimating customer demand is difficult. 
B)  The company grants little or no credit. 
C)  The company is selling low priced clothing. 
D)  Inventory turns over frequently. 
E)  The company has little inventory.

Question 8

Total asset turnover can be calculated regardless of the type of company being evaluated.

Accepted Answer

A) True 
 B)False

Question 9

Financial statements with data for two or more successive accounting periods placed in columns side by side,sometimes with changes shown in dollar amounts and percentages,are:

Accepted Answer

A)  Cost statements. 
B)  Controlling statements. 
C)  Successive statements. 
D)  Comparative statements. 
E)  Position statements. 
A)  Cost statements. 
B)  Controlling statements. 
C)  Successive statements. 
D)  Comparative statements. 
E)  Position statements.

Question 10

Explain how to calculate the times interest earned ratio and how it is used to analyze a company.

Accepted Answer

The times interest earned ratio is calcu

Question 11

Financial statement analysis is the application of analytical tools to general-purpose financial statements and related data for making business decisions.

Accepted Answer

A) True 
 B)False

Question 12

Because debt can have the effect of increasing the return to shareholders,the use of debt is sometimes described as financial leverage.

Accepted Answer

A) True 
 B)False

Question 13

Kreuger Corp has earnings per share of $4.50,dividends per share of $0.85,and a market price of $64.75.Its dividend yield is 21.4%.

Accepted Answer

A) True 
 B)False

Question 14

Evaluation of company performance includes:

Accepted Answer

A)  Past performance. 
B)  Current performance. 
C)  Current financial position. 
D)  Future performance and risk. 
E)  All of these answers are correct. 
A)  Past performance. 
B)  Current performance. 
C)  Current financial position. 
D)  Future performance and risk. 
E)  All of these answers are correct.

Question 15

Lottery Corp had a market price of $56.50,earnings per share of $1.25,and dividends per share of $0.40.Its price-earnings ratio was:

Accepted Answer

A)  3.1. 
B)  45.2. 
C)  48.6. 
D)  49.3. 
E)  51.2 
A)  3.1. 
B)  45.2. 
C)  48.6. 
D)  49.3. 
E)  51.2

Question 16

Brown Company has net income of $125,000.Its net sales were $1,739,000 and its average total assets were $2,750,000.Its profit margin was 7.2%.

Accepted Answer

A) True 
 B)False

Question 17

Explain the profit margin ratio and discuss its use in analyzing a company's performance.

Accepted Answer

Profit margin is calculated by dividing

Question 18

Return on total assets is a profitability measure.

Accepted Answer

A) True 
 B)False

Question 19

The ____________________ ratio measures the liquidity of receivables.

Accepted Answer

Days' sale

Question 20

Liquidity and efficiency are considered to be building blocks of financial statement analysis.

Accepted Answer

A) True 
 B)False

Three of the most common tools of financial analysis are:

Explain the pledged assets to secured liabilities ratio and how it is used in the analysis of a company's financial condition.

Ratios,like other analytical tools,are usually historically oriented.

Bob's Burgers has total assets of $425 million.Its total liabilities are $100 million.Its equity is $285 million.Calculate the debt ratio.

Jolly Co.had net sales of $111,500 and accounts receivable of $12,700.Its days' sales uncollected was:

Secured creditors of a company demand a high ratio of pledged assets to secured liabilities when (1)the values of the assets in liquidation are _ and (2)the likelihood of the company to meet its obligation from _____ is weak.

A company should maintain a current ratio of two to one when:

Total asset turnover can be calculated regardless of the type of company being evaluated.

Financial statements with data for two or more successive accounting periods placed in columns side by side,sometimes with changes shown in dollar amounts and percentages,are:

Explain how to calculate the times interest earned ratio and how it is used to analyze a company.

Financial statement analysis is the application of analytical tools to general-purpose financial statements and related data for making business decisions.

Because debt can have the effect of increasing the return to shareholders,the use of debt is sometimes described as financial leverage.

Kreuger Corp has earnings per share of $4.50,dividends per share of $0.85,and a market price of $64.75.Its dividend yield is 21.4%.

Evaluation of company performance includes:

Lottery Corp had a market price of $56.50,earnings per share of $1.25,and dividends per share of $0.40.Its price-earnings ratio was:

Brown Company has net income of $125,000.Its net sales were $1,739,000 and its average total assets were $2,750,000.Its profit margin was 7.2%.

Explain the profit margin ratio and discuss its use in analyzing a company's performance.

Return on total assets is a profitability measure.

The ____________________ ratio measures the liquidity of receivables.

Liquidity and efficiency are considered to be building blocks of financial statement analysis.

Property,plant and Equipment,and Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Filters

Exam 18: Analyzing Financial Statements

Three of the most common tools of financial analysis are:

Explain the pledged assets to secured liabilities ratio and how it is used in the analysis of a company's financial condition.

Ratios,like other analytical tools,are usually historically oriented.

Bob's Burgers has total assets of $425 million.Its total liabilities are $100 million.Its equity is $285 million.Calculate the debt ratio.

Jolly Co.had net sales of $111,500 and accounts receivable of $12,700.Its days' sales uncollected was:

Secured creditors of a company demand a high ratio of pledged assets to secured liabilities when (1)the values of the assets in liquidation are _______________ and (2)the likelihood of the company to meet its obligation from ___________________ is weak.

A company should maintain a current ratio of two to one when:

Total asset turnover can be calculated regardless of the type of company being evaluated.

Financial statements with data for two or more successive accounting periods placed in columns side by side,sometimes with changes shown in dollar amounts and percentages,are:

Explain how to calculate the times interest earned ratio and how it is used to analyze a company.

Financial statement analysis is the application of analytical tools to general-purpose financial statements and related data for making business decisions.

Because debt can have the effect of increasing the return to shareholders,the use of debt is sometimes described as financial leverage.

Kreuger Corp has earnings per share of $4.50,dividends per share of $0.85,and a market price of $64.75.Its dividend yield is 21.4%.

Evaluation of company performance includes:

Lottery Corp had a market price of $56.50,earnings per share of $1.25,and dividends per share of $0.40.Its price-earnings ratio was:

Brown Company has net income of $125,000.Its net sales were $1,739,000 and its average total assets were $2,750,000.Its profit margin was 7.2%.

Explain the profit margin ratio and discuss its use in analyzing a company's performance.

Return on total assets is a profitability measure.

The ____________________ ratio measures the liquidity of receivables.

Liquidity and efficiency are considered to be building blocks of financial statement analysis.

Property,plant and Equipment,and Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Filters

Secured creditors of a company demand a high ratio of pledged assets to secured liabilities when (1)the values of the assets in liquidation are _ and (2)the likelihood of the company to meet its obligation from _____ is weak.