Question 1

On a common-size income statement, operating income should be stated as a percentage of:

Accepted Answer

A)  net income. 
B)  sales revenue. 
C)  operating income. 
D)  total assets. 
A)  net income. 
B)  sales revenue. 
C)  operating income. 
D)  total assets.

Question 2

On a common-size income statement, net income should be stated as a percentage of:

Accepted Answer

A)  net income. 
B)  sales revenue. 
C)  gross profit. 
D)  total assets. 
A)  net income. 
B)  sales revenue. 
C)  gross profit. 
D)  total assets.

Question 3

Neptune Ltd. has the following information available for 2011 and 2012:   Converting the 2012 column into a common-size statement would show current assets as being:

Accepted Answer

A)  60 percent higher than 2011 current assets. 
B)  67 percent of 2012 total assets. 
C)  71 percent of 2011 total assets. 
D)  50 percent higher than 2012 long-term assets. 
A)  60 percent higher than 2011 current assets. 
B)  67 percent of 2012 total assets. 
C)  71 percent of 2011 total assets. 
D)  50 percent higher than 2012 long-term assets.

Question 4

Which of the following statements regarding horizontal analysis is false?

Accepted Answer

A)  Horizontal analysis can include more than two years of financial data. 
B)  Horizontal analysis is facilitated by computing dollar and percentage changes in financial statement items. 
C)  Horizontal analysis analyzes ratio differences occurring between companies. 
D)  Horizontal analysis can include the statement of cash flows. 
A)  Horizontal analysis can include more than two years of financial data. 
B)  Horizontal analysis is facilitated by computing dollar and percentage changes in financial statement items. 
C)  Horizontal analysis analyzes ratio differences occurring between companies. 
D)  Horizontal analysis can include the statement of cash flows.

Question 5

Discuss one limitation of financial statement analysis.

Accepted Answer

Financial statement

Question 6

Vance Inc. had the following condensed income statements for the years ending December 31, 2012 and 2011.
   Required: Using horizontal analysis, complete the comparative income statement by computing dollar change ($change) and percentage change (% change). Round percentages to two decimal places.

Accepted Answer

The answer of Vance Inc. had the following condensed income...

Question 7

The easiest part of ratio analysis is:

Accepted Answer

A)  the interpretation of the ratio. 
B)  analyzing trends or changes in them. 
C)  using the ratio to make decisions. 
D)  the computation of the ratio. 
A)  the interpretation of the ratio. 
B)  analyzing trends or changes in them. 
C)  using the ratio to make decisions. 
D)  the computation of the ratio.

Question 8

Hardister Corp. Hardister Corp. has the following information available from its financial statements for 2012:
  Refer to the Hardister Corp. information above. Assuming Hardister had total assets at the end of 2011 of $800,000 and an income tax rate of 37.5 percent, what would be return on assets for 2012? (round to the nearest whole percent)

Accepted Answer

A)  63% 
B)  43% 
C)  57% 
D)  59% 
A)  63% 
B)  43% 
C)  57% 
D)  59%

Question 9

Analyzing financial statement account balances over time for the same company is called:

Accepted Answer

A)  vertical analysis. 
B)  horizontal analysis. 
C)  common-size analysis. 
D)  price analysis. 
A)  vertical analysis. 
B)  horizontal analysis. 
C)  common-size analysis. 
D)  price analysis.

Question 10

A quick ratio ____ is often a concern for creditors and managers.

Accepted Answer

A)  of more than one 
B)  of less than one 
C)  equal to one 
D)  of more than two 
A)  of more than one 
B)  of less than one 
C)  equal to one 
D)  of more than two

Question 11

McCabe Inc. has the following information available for 2011 and 2012:   McCabe's working capital in 2012 is:

Accepted Answer

A)  $124,000. 
B)  $248,000. 
C)  $234,000. 
D)  $367,000. 
A)  $124,000. 
B)  $248,000. 
C)  $234,000. 
D)  $367,000.

Question 12

Ratio analysis is least likely to indicate:

Accepted Answer

A)  past performance. 
B)  future performance. 
C)  the effects of inflation. 
D)  trends in a company's performance. 
A)  past performance. 
B)  future performance. 
C)  the effects of inflation. 
D)  trends in a company's performance.

Question 13

What is meant by the term solvency and why are stakeholders interested in ratios that measure it?

Accepted Answer

Solvency refers to the financial positio

Question 14

Michaud Ltd. has the following information available for 2011 and 2012:   Which of the following statements is true regarding horizontal analysis with respect to Michaud?

Accepted Answer

A)  It would show total assets has increased by 30 percent. 
B)  It would show total assets has increased by 53.8 percent. 
C)  There is not enough information available to perform horizontal analysis. 
D)  Horizontal analysis can not be performed using total assets. 
A)  It would show total assets has increased by 30 percent. 
B)  It would show total assets has increased by 53.8 percent. 
C)  There is not enough information available to perform horizontal analysis. 
D)  Horizontal analysis can not be performed using total assets.

Question 15

Grogan Inc. Grogan Inc. had the following information available from its 2011 and 2012 financial statements:
  Refer to the Grogan Inc. information above. Grogan's ratio cash flow from operations to capital expenditures for 2012 is: (round to two decimal places)

Accepted Answer

A)  170.00%. 
B)  58.82%. 
C)  250.00% 
D)  88.24%. 
A)  170.00%. 
B)  58.82%. 
C)  250.00% 
D)  88.24%.

Question 16

Partin Manufacturing Partin Manufacturing has the following information available from its 12/31/12 and 12/31/11 financial statements:
    Refer to the Partin Manufacturing information above. Partin's working capital for the year 2012 is:

Accepted Answer

A)  $138,000. 
B)  $ 38,000. 
C)  $ 88,000. 
D)  $ 78,000. 
A)  $138,000. 
B)  $ 38,000. 
C)  $ 88,000. 
D)  $ 78,000.

Question 17

Grogan Inc. Grogan Inc. had the following information available from its 2011 and 2012 financial statements:
  Refer to the Grogan Inc. information above. Converting the 2012 column into a common-size statement would show current assets as being: (round to two decimal places)

Accepted Answer

A)  9.66 percent of long-term assets. 
B)  8.81 percent of total assets. 
C)  27.49 percent of net income. 
D)  133.33 percent of 2011's current assets. 
A)  9.66 percent of long-term assets. 
B)  8.81 percent of total assets. 
C)  27.49 percent of net income. 
D)  133.33 percent of 2011's current assets.

Question 18

How are profitability ratios used by different stakeholders? List one profitability ratio.

Accepted Answer

Profitability ratios are used by credito

Question 19

Which of the following accounts should not be included in the calculation of the quick (or acid-test) ratio?

Accepted Answer

A)  Accounts payable 
B)  Accounts receivable 
C)  Cash 
D)  Inventory 
A)  Accounts payable 
B)  Accounts receivable 
C)  Cash 
D)  Inventory

Question 20

Which ratio measures the length of time between the purchase of inventory and the eventual collection of cash from sales?

Accepted Answer

A)  Quick ratio 
B)  Cash-to-cash operating cycle ratio 
C)  Accounts receivable turnover ratio 
D)  Inventory turnover ratio 
A)  Quick ratio 
B)  Cash-to-cash operating cycle ratio 
C)  Accounts receivable turnover ratio 
D)  Inventory turnover ratio

On a common-size income statement, operating income should be stated as a percentage of:

On a common-size income statement, net income should be stated as a percentage of:

Neptune Ltd. has the following information available for 2011 and 2012: Converting the 2012 column into a common-size statement would show current assets as being:

Which of the following statements regarding horizontal analysis is false?

Discuss one limitation of financial statement analysis.

Vance Inc. had the following condensed income statements for the years ending December 31, 2012 and 2011. Required: Using horizontal analysis, complete the comparative income statement by computing dollar change ($change) and percentage change (% change). Round percentages to two decimal places.

The easiest part of ratio analysis is:

Analyzing financial statement account balances over time for the same company is called:

A quick ratio ____ is often a concern for creditors and managers.

McCabe Inc. has the following information available for 2011 and 2012: McCabe's working capital in 2012 is:

Ratio analysis is least likely to indicate:

What is meant by the term solvency and why are stakeholders interested in ratios that measure it?

Michaud Ltd. has the following information available for 2011 and 2012: Which of the following statements is true regarding horizontal analysis with respect to Michaud?

Grogan Inc. Grogan Inc. had the following information available from its 2011 and 2012 financial statements: Refer to the Grogan Inc. information above. Grogan's ratio cash flow from operations to capital expenditures for 2012 is: (round to two decimal places)

Partin Manufacturing Partin Manufacturing has the following information available from its 12/31/12 and 12/31/11 financial statements: Refer to the Partin Manufacturing information above. Partin's working capital for the year 2012 is:

Grogan Inc. Grogan Inc. had the following information available from its 2011 and 2012 financial statements: Refer to the Grogan Inc. information above. Converting the 2012 column into a common-size statement would show current assets as being: (round to two decimal places)

How are profitability ratios used by different stakeholders? List one profitability ratio.

Which of the following accounts should not be included in the calculation of the quick (or acid-test) ratio?

Which ratio measures the length of time between the purchase of inventory and the eventual collection of cash from sales?

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, Cost Terminology, and Cost Flows

Job Costing, Process Costing, and Operations Costing

Activity-Based Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs and Product Planning Decisions

Long-Term Capital Investment Decisions

The Use of Budgets in Planning and Decision Making

Variance Analysis A Tool for Cost Control and Performance Evaluation

Decentralization, Performance Evaluation, and the Balanced Scorecard

The Statement of Cash Flows

Filters

Exam 12: Financial Statement Analysis

On a common-size income statement, operating income should be stated as a percentage of:

On a common-size income statement, net income should be stated as a percentage of:

Neptune Ltd. has the following information available for 2011 and 2012: Converting the 2012 column into a common-size statement would show current assets as being:

Which of the following statements regarding horizontal analysis is false?

Discuss one limitation of financial statement analysis.

Vance Inc. had the following condensed income statements for the years ending December 31, 2012 and 2011. Required: Using horizontal analysis, complete the comparative income statement by computing dollar change ($change) and percentage change (% change). Round percentages to two decimal places.

The easiest part of ratio analysis is:

Analyzing financial statement account balances over time for the same company is called:

A quick ratio ____ is often a concern for creditors and managers.

McCabe Inc. has the following information available for 2011 and 2012: McCabe's working capital in 2012 is:

Ratio analysis is least likely to indicate:

What is meant by the term solvency and why are stakeholders interested in ratios that measure it?

Michaud Ltd. has the following information available for 2011 and 2012: Which of the following statements is true regarding horizontal analysis with respect to Michaud?

Grogan Inc. Grogan Inc. had the following information available from its 2011 and 2012 financial statements: Refer to the Grogan Inc. information above. Grogan's ratio cash flow from operations to capital expenditures for 2012 is: (round to two decimal places)

Partin Manufacturing Partin Manufacturing has the following information available from its 12/31/12 and 12/31/11 financial statements: Refer to the Partin Manufacturing information above. Partin's working capital for the year 2012 is:

Grogan Inc. Grogan Inc. had the following information available from its 2011 and 2012 financial statements: Refer to the Grogan Inc. information above. Converting the 2012 column into a common-size statement would show current assets as being: (round to two decimal places)

How are profitability ratios used by different stakeholders? List one profitability ratio.

Which of the following accounts should not be included in the calculation of the quick (or acid-test) ratio?

Which ratio measures the length of time between the purchase of inventory and the eventual collection of cash from sales?

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, Cost Terminology, and Cost Flows

Job Costing, Process Costing, and Operations Costing

Activity-Based Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs and Product Planning Decisions

Long-Term Capital Investment Decisions

The Use of Budgets in Planning and Decision Making

Variance Analysis A Tool for Cost Control and Performance Evaluation

Decentralization, Performance Evaluation, and the Balanced Scorecard

The Statement of Cash Flows

Filters