Question 1

Refer to the following selected financial information from McCormik, LLC. Compute the company's inventory turnover for Year 2.

Accepted Answer

A) 4.72. 
B) 4.33. 
C) 3.28. 
D) 5.78. 
E) 3.86. 
A) 4.72. 
B) 4.33. 
C) 3.28. 
D) 5.78. 
E) 3.86.

Question 2

If a company is comparing this year's financial performance to last year's financial performance, it is using horizontal analysis.

Accepted Answer

A) True 
 B)False

Question 3

All of the following are true of financial statement analysis reports, except:

Accepted Answer

A) Contains ambiguities and qualifications. 
B) Forces preparers to organize their reasoning and to verify the logic of analysis. 
C) Serves as a method of communication to users. 
D) Helps users and preparers to refine conclusions based on evidence from key building blocks. 
E) Enables readers to see the process and rationale of analysis. 
A) Contains ambiguities and qualifications. 
B) Forces preparers to organize their reasoning and to verify the logic of analysis. 
C) Serves as a method of communication to users. 
D) Helps users and preparers to refine conclusions based on evidence from key building blocks. 
E) Enables readers to see the process and rationale of analysis.

Question 4

Standards for comparison are not generally necessary when making judgments about a company's performance.

Accepted Answer

A) True 
 B)False

Question 5

Guidelines (rules-of-thumb) are general standards of comparison developed from:

Accepted Answer

A) Industry statistics from the government. 
B) Past experience. 
C) Analysis of competitors. 
D) Relations between financial items. 
E) Dun and Bradstreet. 
A) Industry statistics from the government. 
B) Past experience. 
C) Analysis of competitors. 
D) Relations between financial items. 
E) Dun and Bradstreet.

Question 6

The evaluation of company performance and financial condition includes evaluation of (1) past and current performance, (2) current financial position, and (3) future performance and risk.

Accepted Answer

A) True 
 B)False

Question 7

When a company's activities include income-related events not part of normal, continuing operations, the complete income statement could potentially have the following sections:

Accepted Answer

A) Items from continuing operations and earnings per share for a corporation. 
B) Income or loss from operating a discontinued segment for the current period. 
C) The loss from disposing of the discontinued segment's net assets. 
D) Extraordinary items. 
E) Continuing operations, discontinued segments, and earnings per share for a corporation. 
A) Items from continuing operations and earnings per share for a corporation. 
B) Income or loss from operating a discontinued segment for the current period. 
C) The loss from disposing of the discontinued segment's net assets. 
D) Extraordinary items. 
E) Continuing operations, discontinued segments, and earnings per share for a corporation.

Question 8

The background on a company, its industry, and its economic setting is usually included in which of the following sections of a financial statement analysis report?

Accepted Answer

A) Executive summary. 
B) Analysis overview. 
C) Evidential conclusions. 
D) Factor analysis. 
E) Inferences. 
A) Executive summary. 
B) Analysis overview. 
C) Evidential conclusions. 
D) Factor analysis. 
E) Inferences.

Question 9

The current ratio is calculated as current liabilities divided by current assets.

Accepted Answer

A) True 
 B)False

Question 10

The following information is available for the Marr Corporation:   Calculate the company's accounts receivable turnover and its days' sales uncollected.

Accepted Answer

Accounts receivable turnover =

Question 11

A trend percent, or index number, is calculated by dividing the analysis period amount by the base period amount and multiplying the result by 100.

Accepted Answer

A) True 
 B)False

Question 12

Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 trend percentages for cost of goods sold using 2016 as the base.

Accepted Answer

A) 36.4% for 2017 and 41.1% for 2016. 
B) 55.0% for 2017 and 56.0% for 2016. 
C) 119.4% for 2017 and 100.0% for 2016. 
D) 117.2% for 2017 and 100.0% for 2016. 
E) 65.1% for 2017 and 64.6% for 2016. 
A) 36.4% for 2017 and 41.1% for 2016. 
B) 55.0% for 2017 and 56.0% for 2016. 
C) 119.4% for 2017 and 100.0% for 2016. 
D) 117.2% for 2017 and 100.0% for 2016. 
E) 65.1% for 2017 and 64.6% for 2016.

Question 13

A company's calendar-year financial data are shown below. The company had total assets of $339,000 and total equity of $144,400 for the prior year. No additional shares of common stock were issued during the year. The December 31 market price per share is $49.50. Cash dividends of $19,500 were paid during the year. Calculate the following ratios for the company:
(a) profit margin ratio
(b) gross margin ratio
(c) return on total assets
(d) return on common stockholders' equity
(e) book value per common share
(f) basic earnings per share
(g) price earnings ratio
(h) dividend yield.

Accepted Answer

The answer of A company's calendar-year financial data are shown...

Question 14

The return on total assets ratio is a profitability measure.

Accepted Answer

A) True 
 B)False

Question 15

Refer to the following selected financial information from McCormik, LLC. Compute the company's accounts receivable turnover for Year 2.

Accepted Answer

A) 8.62. 
B) 8.28. 
C) 8.94. 
D) 5.78. 
E) 7.90. 
A) 8.62. 
B) 8.28. 
C) 8.94. 
D) 5.78. 
E) 7.90.

Question 16

All of the following statements regarding a business segment are true except:

Accepted Answer

A) A business segment is a part of a company's operations that serves a particular product line. 
B) A segment has assets, liabilities, and financial results of operations that can be distinguished from those of other parts of the company. 
C) A company's gain or loss from selling or closing down a segment is reported separately. 
D) The income tax effects of a discontinued segment are combined with income tax from continuing operations. 
E) A segment's income for the period prior to the disposal and the gain or loss resulting from disposing of the segment's assets are reported separately. 
A) A business segment is a part of a company's operations that serves a particular product line. 
B) A segment has assets, liabilities, and financial results of operations that can be distinguished from those of other parts of the company. 
C) A company's gain or loss from selling or closing down a segment is reported separately. 
D) The income tax effects of a discontinued segment are combined with income tax from continuing operations. 
E) A segment's income for the period prior to the disposal and the gain or loss resulting from disposing of the segment's assets are reported separately.

Question 17

The debt ratio, the equity ratio, pledged assets to secured liabilities, and times interest earned are all ___________________ ratios.

Accepted Answer

The answer of The debt ratio, the equity ratio, pledged...

Question 18

Jones Corp. reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet. The working capital is:

Accepted Answer

A) 141%. 
B) 71%. 
C) ($56,000). 
D) $56,000. 
E) 41%. 
A) 141%. 
B) 71%. 
C) ($56,000). 
D) $56,000. 
E) 41%.

Question 19

A rough guideline states that for a company with no discounts offered, days' sales uncollected should not exceed 1 1/3 times the days in its credit period.

Accepted Answer

A) True 
 B)False

Question 20

For the following financial statement items, calculate trend percentages using 2014 as the base year:

Accepted Answer

The answer of For the following financial statement items, calculate...

Refer to the following selected financial information from McCormik, LLC. Compute the company's inventory turnover for Year 2.

If a company is comparing this year's financial performance to last year's financial performance, it is using horizontal analysis.

All of the following are true of financial statement analysis reports, except:

Standards for comparison are not generally necessary when making judgments about a company's performance.

Guidelines (rules-of-thumb) are general standards of comparison developed from:

The evaluation of company performance and financial condition includes evaluation of (1) past and current performance, (2) current financial position, and (3) future performance and risk.

When a company's activities include income-related events not part of normal, continuing operations, the complete income statement could potentially have the following sections:

The background on a company, its industry, and its economic setting is usually included in which of the following sections of a financial statement analysis report?

The current ratio is calculated as current liabilities divided by current assets.

The following information is available for the Marr Corporation: Calculate the company's accounts receivable turnover and its days' sales uncollected.

A trend percent, or index number, is calculated by dividing the analysis period amount by the base period amount and multiplying the result by 100.

Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 trend percentages for cost of goods sold using 2016 as the base.

The return on total assets ratio is a profitability measure.

Refer to the following selected financial information from McCormik, LLC. Compute the company's accounts receivable turnover for Year 2.

All of the following statements regarding a business segment are true except:

The debt ratio, the equity ratio, pledged assets to secured liabilities, and times interest earned are all ___________________ ratios.

Jones Corp. reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet. The working capital is:

A rough guideline states that for a company with no discounts offered, days' sales uncollected should not exceed 1 1/3 times the days in its credit period.

For the following financial statement items, calculate trend percentages using 2014 as the base year:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters

Exam 13: Analyzing and Interpreting Financial Statements

Refer to the following selected financial information from McCormik, LLC. Compute the company's inventory turnover for Year 2.

If a company is comparing this year's financial performance to last year's financial performance, it is using horizontal analysis.

All of the following are true of financial statement analysis reports, except:

Standards for comparison are not generally necessary when making judgments about a company's performance.

Guidelines (rules-of-thumb) are general standards of comparison developed from:

The evaluation of company performance and financial condition includes evaluation of (1) past and current performance, (2) current financial position, and (3) future performance and risk.

When a company's activities include income-related events not part of normal, continuing operations, the complete income statement could potentially have the following sections:

The background on a company, its industry, and its economic setting is usually included in which of the following sections of a financial statement analysis report?

The current ratio is calculated as current liabilities divided by current assets.

The following information is available for the Marr Corporation: Calculate the company's accounts receivable turnover and its days' sales uncollected.

A trend percent, or index number, is calculated by dividing the analysis period amount by the base period amount and multiplying the result by 100.

Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 trend percentages for cost of goods sold using 2016 as the base.

The return on total assets ratio is a profitability measure.

Refer to the following selected financial information from McCormik, LLC. Compute the company's accounts receivable turnover for Year 2.

All of the following statements regarding a business segment are true except:

The debt ratio, the equity ratio, pledged assets to secured liabilities, and times interest earned are all ___________________ ratios.

Jones Corp. reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet. The working capital is:

A rough guideline states that for a company with no discounts offered, days' sales uncollected should not exceed 1 1/3 times the days in its credit period.

For the following financial statement items, calculate trend percentages using 2014 as the base year:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters