Exam 1: Overview of Financial Reporting, Financial Statement Analysis, and Valuation

What is the rationale for the statement of cash flows?

Current assets are defined as

Which of the following is not one of Porter's five forces?

During 2011, Waggoner Company performed services for which customers paid or promised to pay $587,000. Of this amount, $552,000 had been collected by year end. Waggoner paid $340,000 in cash for employee wages and owed the employees $15,000 at the end of the year for work that had been done but had not paid for. Waggoner paid interest expense of $3,000 and $195,000 for other service expenses. The income tax rate was 35%, and income taxes had not yet been paid at the end of the year. Waggoner declared and paid dividends of $20,000. There were no other events that affected cash. Required: 1. What was the amount of the increase or decrease in cash during the year? 2. Prepare an income statement for Waggoner for the year (December 31 year-end).

______________________________ relates to the relative number of buyers and sellers in a particular industry.

Prepare an analysis of the automobile manufacturing industry using Porter's five forces framework. For each component force provide support for your conclusion. In addition, at the completion of your analysis provide a conclusion, along with support, of whether you expect the automobile industry to report high or low profitability in the near future.

Obtaining a competitive advantage by being the first company to introduce new concepts or ideas is referred to as ________________________________________.

When assessing buyer power using Porter's five forces, which of the following is not consistent with low buyer power?

Comparative financial statements for Larson Company, prepared on December 31 are shown below: Income Statement Sales revenue Cost of goods sold Gross profit Operating expenses and interest expense Pretax income Income tax Net income Balance Sheet Cash Accounts receivable (net) Inventory Operational assets(net) Current liabilities (no interest) Long-term liabilities (10\% interest) Common stock par \ 5 Retained earnings 2012 \1 90,000 78,000 22,000 \4 ,000 14,000 40,000 \1 6,000 45,000 30,000 2011 \1 67,000 67,000 14,000 \7 ,000 18,000 34,000 \1 7,000 45,000 30,000 Required: Assume that one-third of sales are on credit and that cash dividends of $3,000 were declared and paid in 2012. Then, complete a percentage change income statement and a percentage change balance sheet for the company, using both amount and percentage changes from 2011 to 2012.

What are three activities reported in the statement of cash flows and what information does each activity provide?

Which of these is not an intangible asset?

Which of the following is not considered to be a liability?

Tremble Company manufactures outdoors wear for women. During 2009, the company reported the following items that affected cash. Required: Indicate whether each of these items is a cash flow from operating activities (O), investing activities (I), or financing activities (F). _____A. Paid cash for supplies _____B. Purchased equipment by paying cash _____C. Collected cash on account from customers _____D. Paid dividends to stockholders _____E. Paid suppliers for fabric _____F. Borrowed money from a bank on a long-term note _____G. Paid interest to bank on the note _____H. Paid wages to employees _____I. Sold shares of common stock to new stockholders

A value chain for an industry sets forth

The ______________________________ sets forth the sequence of activities involved in the creation, manufacture and distribution of its products and services.

When attempting to identify the economic characteristics of the industry in which a particular firm participates an analyst might ask which of the following questions?

When assessing the threat of new entrants what questions might an analyst ask about an industry?

Firms intending to issue new bonds or capital stock file a ____________________ with the SEC that describes the offering.

Nickel Industries reported the following amounts on its balance sheet on December 31, 2011: Cash \ 180,000 Notes payable 100,000 Inventory 325,000 Contributed Capital 750,000 Net Property, Plant \& Equipment 600,000 Accounts Receivable 30,000 Accounts Payable 75,000 RetainedEarnings ? Required: 1. What is the amount of Nickel's total assets at the end of 2011? 2. Identify the items listed above that are liabilities. 3. What is the amount of Nickel's retained earnings at the end of 2011? 4. Prepare a balance sheet for Nickel Industries using U.S. GAAP as of December 31, 2011. 5. Nickel Industries wishes to purchase merchandise from your company on account. The amount of the purchases would probably be about $11,000 per month, and the terms would require Nickel to make payment in full within 30 days. Would you recommend that your company grant credit to Nickel under these terms? Explain the reasoning for your response.

The five economic attributes that are normally studied are demand, supply, manufacturing, ____________________, and investing and financing.