Question 1

A company has $56,000 in cash;$12,000 in Accounts Receivable;$25,000 in short-term investments and $100,000 in merchandise inventory.The company also has $60,000 in current liabilities.The company's quick ratio is:

Accepted Answer

A) 3)217. 
B) 1)550. 
C) 1)133. 
D) 0)933.

Question 2

Comparative reports in which each item is expressed as a percentage of a base amount without dollar amounts are called:

Accepted Answer

A) comparative financial statements. 
B) common-size statements. 
C) cash flow analysis. 
D) horizontal analysis.

Question 3

Two measures that are often looked at in valuing a business are:

Accepted Answer

A) Earnings per Share and Dividend per Share. 
B) Earnings per Share and Dividend Yield. 
C) Price Earnings Ratio and Dividend Yield. 
D) Price Earnings Ratio and Dividend per Share.

Question 4

Inventory and prepaid expenses are NOT included in the computation of the:

Accepted Answer

A) quick ratio. 
B) current ratio. 
C) debt ratio. 
D) working capital ratio.

Question 5

A measure of how well earnings support dividend payments is:

Accepted Answer

A) earnings per share. 
B) dividend payout ratio. 
C) dividends per share. 
D) dividend yield.

Question 6

A low price earnings ratio typically means the future of a business is very bright.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a profitability ratio?

Accepted Answer

A) Cash conversion cycle 
B) Earnings per share 
C) Debt ratio 
D) Gross profit percentage

Question 8

Shore Stone Supply has an average days' in receivable of 41 days.Shore's Accounts Receivable turnover is closest to:

Accepted Answer

A) 41. 
B) 9) 
C) 10. 
D) 14.

Question 9

Statements that are often used to compare different size businesses are called:

Accepted Answer

A) comparative analysis. 
B) cash flow analysis. 
C) common-size statements. 
D) horizontal analysis.

Question 10

Gains and losses on plant,property,and equipment are reported:

Accepted Answer

A) as a retrospective application. 
B) in the discontinued operations section. 
C) in the continuing operations section. 
D) in the extraordinary items section.

Question 11

Evergreen Supply Co.sells hiking and other outdoor equipment.It also sells a few trail books and outdoor guides about the area.In their Income Statement,the revenue from the books and guides would probably be recorded as:

Accepted Answer

A) operating income. 
B) other income. 
C) other expenses. 
D) extraordinary income.

Question 12

Which of the following is typically NOT one of the questions asked when analyzing a business' operations?

Accepted Answer

A) How is the business investing its money? 
B) When was the business started? 
C) Is the business a going concern? 
D) Can the business pay its debt obligations?

Question 13

Management discussion and analysis is:

Accepted Answer

A) part of a business's annual report. 
B) prepared by the external auditors. 
C) a summary of all the business's press releases for the year. 
D) both A and B.

Question 14

Island Coffee's cash reported on the comparative Balance Sheet was $235,000 in 2013 and $245,300 in 2014.The percentage change in cash from 2013 to 2014 was:

Accepted Answer

A) +4.20%. 
B) +4.38%. 
C) -4.38%. 
D) -4.20%.

Question 15

Which of the following is NOT a liquidity ratio?

Accepted Answer

A) Current ratio 
B) Accounts Payable payment period 
C) Accounts Receivable turnover ratio 
D) Receivables collection period

Question 16

The most recent period in a horizontal analysis is called the base period.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is a solvency ratio?

Accepted Answer

A) Cash conversion cycle 
B) Earnings per share 
C) Debt ratio 
D) Gross profit percentage

Question 18

Horizontal analysis is only done on the Income Statement.

Accepted Answer

A) True 
 B)False

Question 19

Serenity Sounds,Inc.reported the following for 2012:

What are the earnings per share for Serenity Sounds,Inc.(to the nearest cent)?

Accepted Answer

A) $37.00/share 
B) $28.75/share 
C) $0.41/share 
D) $3.70/share

Question 20

Everyday business activities are reported in the:

Accepted Answer

A) continuing and discontinued operations section. 
B) discontinued operations section. 
C) continuing operations section. 
D) extraordinary items section.

Exam 12: Financial Statement Analysis

A company has $56,000 in cash;$12,000 in Accounts Receivable;$25,000 in short-term investments and $100,000 in merchandise inventory.The company also has $60,000 in current liabilities.The company's quick ratio is:

Comparative reports in which each item is expressed as a percentage of a base amount without dollar amounts are called:

Two measures that are often looked at in valuing a business are:

Inventory and prepaid expenses are NOT included in the computation of the:

A measure of how well earnings support dividend payments is:

A low price earnings ratio typically means the future of a business is very bright.

Which of the following is a profitability ratio?

Shore Stone Supply has an average days' in receivable of 41 days.Shore's Accounts Receivable turnover is closest to:

Statements that are often used to compare different size businesses are called:

Gains and losses on plant,property,and equipment are reported:

Evergreen Supply Co.sells hiking and other outdoor equipment.It also sells a few trail books and outdoor guides about the area.In their Income Statement,the revenue from the books and guides would probably be recorded as:

Which of the following is typically NOT one of the questions asked when analyzing a business' operations?

Management discussion and analysis is:

Island Coffee's cash reported on the comparative Balance Sheet was $235,000 in 2013 and $245,300 in 2014.The percentage change in cash from 2013 to 2014 was:

Which of the following is NOT a liquidity ratio?

The most recent period in a horizontal analysis is called the base period.

Which of the following is a solvency ratio?

Horizontal analysis is only done on the Income Statement.

Serenity Sounds,Inc.reported the following for 2012: What are the earnings per share for Serenity Sounds,Inc.(to the nearest cent) ?

Everyday business activities are reported in the: