Question 1

When evaluating its net profit margin for 2015,Coca Cola would most likely use all of the following benchmarks except:

Accepted Answer

A) Anheuser Busch's net profit margin for 2015. 
B) Coca Cola's net profit margin for 2014. 
C) Pepsico's net profit margin for 2015. 
D) The average net profit margin for the soft drink manufacturing industry for 2015. 
A) Anheuser Busch's net profit margin for 2015. 
B) Coca Cola's net profit margin for 2014. 
C) Pepsico's net profit margin for 2015. 
D) The average net profit margin for the soft drink manufacturing industry for 2015.

Question 2

Which of the following is calculated by dividing net sales by average accounts receivable?

Accepted Answer

A) Days to sell ratio. 
B) Current ratio. 
C) Profit margin. 
D) Accounts receivable turnover ratio. 
A) Days to sell ratio. 
B) Current ratio. 
C) Profit margin. 
D) Accounts receivable turnover ratio.

Question 3

The following information is available for a company for the current year: Which of the following is closest to the company's days to collect ratio for the current year?

Accepted Answer

A) 91.25 
B) 84.88 
C) 57.84 
D) 34.37 
A) 91.25 
B) 84.88 
C) 57.84 
D) 34.37

Question 4

Solvency ratio data are primarily concerned with the ability of a company to:

Accepted Answer

A) produce profits. 
B) handle its debt. 
C) manage its cash flow. 
D) provide income for stockholders. 
A) produce profits. 
B) handle its debt. 
C) manage its cash flow. 
D) provide income for stockholders.

Question 5

Common size financial statements are not useful in analyzing companies of different size.Common size analysis provides information by expressing each financial statement amount as a percent of another amount on the same statement.These percentages allow for the comparison of financial statement items between companies of different size.

Accepted Answer

A) True 
 B)False

Question 6

The ratio that measures the percentage of financing from creditors is the:

Accepted Answer

A) Current ratio. 
B) Times interest earned ratio. 
C) Debt to assets ratio. 
D) Price/earnings ratio. 
A) Current ratio. 
B) Times interest earned ratio. 
C) Debt to assets ratio. 
D) Price/earnings ratio.

Question 7

Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The gross profit percentage is closest to:

Accepted Answer

A) 32%. 
B) 56%. 
C) 86%. 
D) 14%. 
A) 32%. 
B) 56%. 
C) 86%. 
D) 14%.

Question 8

If an analyst wanted to examine a company's long-run ability to survive,which of the following would best be considered?

Accepted Answer

A) Liquidity. 
B) Market share. 
C) Profitability. 
D) Solvency. 
A) Liquidity. 
B) Market share. 
C) Profitability. 
D) Solvency.

Question 9

Which of the following is generally the most useful in analyzing companies of different size?

Accepted Answer

A) Comparative financial statements. 
B) Horizontal analysis. 
C) Common size financial statements. 
D) Trend analysis. 
A) Comparative financial statements. 
B) Horizontal analysis. 
C) Common size financial statements. 
D) Trend analysis.

Question 10

Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The net profit margin is closest to:

Accepted Answer

A) 0.32. 
B) 0.56. 
C) 0.86. 
D) 0.14. 
A) 0.32. 
B) 0.56. 
C) 0.86. 
D) 0.14.

Question 11

Trend analysis is a form of horizontal analysis.Horizontal analysis is a comparison of the trends in a company's financial information over time.

Accepted Answer

A) True 
 B)False

Question 12

The asset turnover ratio is a profitability ratio.The asset turnover ratio is a profitability ratio that indicates the amount of sales revenue generated for each dollar invested in assets.

Accepted Answer

A) True 
 B)False

Question 13

The following information is taken from the financial statements of a company for the current year: Use the information above to answer the following question.The gross profit percentage for the current year rounded to the nearest whole percent is closest to

Accepted Answer

A) 24%. 
B) 76%. 
C) 60%. 
D) 31%. 
A) 24%. 
B) 76%. 
C) 60%. 
D) 31%.

Question 14

Which of the following measures would assist in assessing the liquidity of a company?

Accepted Answer

A) Return on equity. 
B) Fixed asset turnover ratio. 
C) Receivables turnover ratio. 
D) Times interest earned ratio. 
A) Return on equity. 
B) Fixed asset turnover ratio. 
C) Receivables turnover ratio. 
D) Times interest earned ratio.

Question 15

A company has $72,500 of inventory at the beginning of the year and $65,500 at the end of the year.Sales revenue is $986,400,cost of goods sold is $572,700,and net income is $124,200 for the year.The inventory turnover ratio is closest to:

Accepted Answer

A) 1.8. 
B) 8.3. 
C) 6.0. 
D) 14.3. 
A) 1.8. 
B) 8.3. 
C) 6.0. 
D) 14.3.

Question 16

Which of the following measures would assist in assessing the profitability of a company?

Accepted Answer

A) Debt-to-assets ratio. 
B) Fixed asset turnover ratio. 
C) Receivables turnover ratio. 
D) Current ratio. 
A) Debt-to-assets ratio. 
B) Fixed asset turnover ratio. 
C) Receivables turnover ratio. 
D) Current ratio.

Question 17

The primary objective of external financial reporting is:

Accepted Answer

A) to enhance the ability of the company to acquire financial capital from external sources. 
B) to accurately provide financial results for tax purposes. 
C) to comply with external regulations and requirements of government and professional associations. 
D) to provide useful information to decision makers,especially investors and creditors. 
A) to enhance the ability of the company to acquire financial capital from external sources. 
B) to accurately provide financial results for tax purposes. 
C) to comply with external regulations and requirements of government and professional associations. 
D) to provide useful information to decision makers,especially investors and creditors.

Question 18

Which of the following statements is true regarding the relationship of the debt-to-assets ratio and the debt-to-equity ratio?

Accepted Answer

A) Debt to assets is usually greater than debt to equity. 
B) Debt to assets is usually less than debt to equity 
C) Debt to assets is usually equal to debt to equity. 
D) There is no constant relationship between these two ratios. 
A) Debt to assets is usually greater than debt to equity. 
B) Debt to assets is usually less than debt to equity 
C) Debt to assets is usually equal to debt to equity. 
D) There is no constant relationship between these two ratios.

Question 19

If EPS (earnings per share)decreases,it must mean that the company's net income has fallen.A decrease in EPS could result from a decrease in net income,an increase in the average number of shares outstanding,or an increase in the average shares proportionally larger than an increase in net income.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements regarding the P/E ratio is not true?

Accepted Answer

A) The P/E ratio indicates how much investors are willing to pay for a share of a company's stock as a multiple of current earnings. 
B) A high P/E ratio may mean that investors have pushed the price of the stock up in anticipation of higher future net income. 
C) If EPS decreases and there is no change in the market price of the stock,the P/E ratio will decrease. 
D) If the market price of the stock increases and there is no change in EPS,the P/E ratio will increase. 
A) The P/E ratio indicates how much investors are willing to pay for a share of a company's stock as a multiple of current earnings. 
B) A high P/E ratio may mean that investors have pushed the price of the stock up in anticipation of higher future net income. 
C) If EPS decreases and there is no change in the market price of the stock,the P/E ratio will decrease. 
D) If the market price of the stock increases and there is no change in EPS,the P/E ratio will increase.

When evaluating its net profit margin for 2015,Coca Cola would most likely use all of the following benchmarks except:

Which of the following is calculated by dividing net sales by average accounts receivable?

The following information is available for a company for the current year: Which of the following is closest to the company's days to collect ratio for the current year?

Solvency ratio data are primarily concerned with the ability of a company to:

The ratio that measures the percentage of financing from creditors is the:

Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The gross profit percentage is closest to:

If an analyst wanted to examine a company's long-run ability to survive,which of the following would best be considered?

Which of the following is generally the most useful in analyzing companies of different size?

Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The net profit margin is closest to:

Trend analysis is a form of horizontal analysis.Horizontal analysis is a comparison of the trends in a company's financial information over time.

The asset turnover ratio is a profitability ratio.The asset turnover ratio is a profitability ratio that indicates the amount of sales revenue generated for each dollar invested in assets.

The following information is taken from the financial statements of a company for the current year: Use the information above to answer the following question.The gross profit percentage for the current year rounded to the nearest whole percent is closest to

Which of the following measures would assist in assessing the liquidity of a company?

A company has $72,500 of inventory at the beginning of the year and $65,500 at the end of the year.Sales revenue is $986,400,cost of goods sold is $572,700,and net income is $124,200 for the year.The inventory turnover ratio is closest to:

Which of the following measures would assist in assessing the profitability of a company?

The primary objective of external financial reporting is:

Which of the following statements is true regarding the relationship of the debt-to-assets ratio and the debt-to-equity ratio?

If EPS (earnings per share)decreases,it must mean that the company's net income has fallen.A decrease in EPS could result from a decrease in net income,an increase in the average number of shares outstanding,or an increase in the average shares proportionally larger than an increase in net income.

Which of the following statements regarding the P/E ratio is not true?

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing and Cost Management

Cost Behavior

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgetary Planning

Standard Costing and Variances

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Filters

Exam 13: Measuring and Evaluating Financial Performance

When evaluating its net profit margin for 2015,Coca Cola would most likely use all of the following benchmarks except:

Which of the following is calculated by dividing net sales by average accounts receivable?

The following information is available for a company for the current year: Which of the following is closest to the company's days to collect ratio for the current year?

Solvency ratio data are primarily concerned with the ability of a company to:

The ratio that measures the percentage of financing from creditors is the:

Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The gross profit percentage is closest to:

If an analyst wanted to examine a company's long-run ability to survive,which of the following would best be considered?

Which of the following is generally the most useful in analyzing companies of different size?

Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The net profit margin is closest to:

Trend analysis is a form of horizontal analysis.Horizontal analysis is a comparison of the trends in a company's financial information over time.

The asset turnover ratio is a profitability ratio.The asset turnover ratio is a profitability ratio that indicates the amount of sales revenue generated for each dollar invested in assets.

The following information is taken from the financial statements of a company for the current year: Use the information above to answer the following question.The gross profit percentage for the current year rounded to the nearest whole percent is closest to

Which of the following measures would assist in assessing the liquidity of a company?

A company has $72,500 of inventory at the beginning of the year and $65,500 at the end of the year.Sales revenue is $986,400,cost of goods sold is $572,700,and net income is $124,200 for the year.The inventory turnover ratio is closest to:

Which of the following measures would assist in assessing the profitability of a company?

The primary objective of external financial reporting is:

Which of the following statements is true regarding the relationship of the debt-to-assets ratio and the debt-to-equity ratio?

If EPS (earnings per share)decreases,it must mean that the company's net income has fallen.A decrease in EPS could result from a decrease in net income,an increase in the average number of shares outstanding,or an increase in the average shares proportionally larger than an increase in net income.

Which of the following statements regarding the P/E ratio is not true?

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing and Cost Management

Cost Behavior

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgetary Planning

Standard Costing and Variances

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Filters