Question 1

Using the information shown,prepare a horizontal analysis.Carry all calculations to two decimal places and then round to one decimal place.

Accepted Answer

The answer of   Using the information shown,prepare a...

Question 2

A company reported net income of $80,000 for 2016,and net income of $100,000 for 2017.Net income increased by ____________________ percent.

Accepted Answer

The answer of A company reported net income of $80,000...

Question 3

Using the information given,analyze the liquidity of Quotidian Industries for 2017.

Accepted Answer

Working capital = $1,395,000
Current rat

Question 4

In horizontal analysis,the base year is the most recent year.

Accepted Answer

A) True 
 B)False

Question 5

In horizontal analysis,the change from year to year itself can be interpreted to represent the changes in external prices that impact the business.

Accepted Answer

A) True 
 B)False

Question 6

The Terence Hill Company has current assets of $350,000 and a current ratio of .7.Its current liabilities therefore must equal $500,000.

Accepted Answer

A) True 
 B)False

Question 7

Comparison of amounts and percentages for only two years is adequate to indicate long-term trends.

Accepted Answer

A) True 
 B)False

Question 8

If current liabilities are $90,000,long-term liabilities are $270,000,and total assets are $600,000,what is the percentage of total liabilities to total assets?

Accepted Answer

A)  15 percent 
B)  45 percent 
C)  60 percent 
D)  100 percent 
A)  15 percent 
B)  45 percent 
C)  60 percent 
D)  100 percent

Question 9

As a result of extraordinary losses during the year,the number of times bond interest earned ratio decreased from 4.5 times to 1.5 times.This change is indicative of increasing financial strength.

Accepted Answer

A) True 
 B)False

Question 10

Because the number of shares of common stock outstanding during the year can fluctuate,computing return on common stockholders' equity is not a useful indicator of profitability.

Accepted Answer

A) True 
 B)False

Question 11

What is the PE ratio? How is it calculated and why is it that the PE ratio for a privately held company often cannot be calculated?

Accepted Answer

The PE ratio is the price-earnings ratio

Question 12

The current ratio is a measure of profitability.

Accepted Answer

A) True 
 B)False

Question 13

The rate of ____________________ on total assets measures the earnings on the assets used by a company.

Accepted Answer

The answer of The rate of ____________________ on total assets...

Question 14

If total merchandise available for sale is 72 percent of net sales and cost of goods sold is 64 percent of net sales,gross profit on sales is

Accepted Answer

A)  8 percent of net sales. 
B)  36 percent of net sales. 
C)  28 percent of net sales. 
D)  20 percent of net sales. 
A)  8 percent of net sales. 
B)  36 percent of net sales. 
C)  28 percent of net sales. 
D)  20 percent of net sales.

Question 15

The current ratio measures a company's ability to pay its current debts using current assets.

Accepted Answer

A) True 
 B)False

Question 16

A firm has current liabilities of $60,000,stockholders' equity of $180,000 and total assets of $300,000.The percentage of total liabilities to total assets is

Accepted Answer

A)  20 percent. 
B)  40 percent. 
C)  60 percent. 
D)  80 percent. 
A)  20 percent. 
B)  40 percent. 
C)  60 percent. 
D)  80 percent.

Question 17

Simon Company has current liabilities of $30,000 and a current ratio of 1.2.Its current assets therefore must equal $25,000.

Accepted Answer

A) True 
 B)False

Question 18

Peterson Company has current liabilities of $130,000 and working capital of $32,000.Its current assets therefore must equal $162,000.

Accepted Answer

A) True 
 B)False

Question 19

Selected financial ratios are given for Canard Industries and Canaille Manufacturing.Both firms have come to your bank and requested loans.You are a loan officer at Noir Bank but can only loan funds to one of the firms.Make your decision based on the information provided.In a short paragraph,explain the basis for the selection you made.

Accepted Answer

Student answers will vary.They should to

Question 20

The rate of return on sales measures how effectively management has used the assets of the company.

Accepted Answer

A) True 
 B)False

Exam 23: Financial Statement Analyses

Using the information shown,prepare a horizontal analysis.Carry all calculations to two decimal places and then round to one decimal place.

A company reported net income of $80,000 for 2016,and net income of $100,000 for 2017.Net income increased by ____________________ percent.

Using the information given,analyze the liquidity of Quotidian Industries for 2017.

In horizontal analysis,the base year is the most recent year.

In horizontal analysis,the change from year to year itself can be interpreted to represent the changes in external prices that impact the business.

The Terence Hill Company has current assets of $350,000 and a current ratio of .7.Its current liabilities therefore must equal $500,000.

Comparison of amounts and percentages for only two years is adequate to indicate long-term trends.

If current liabilities are $90,000,long-term liabilities are $270,000,and total assets are $600,000,what is the percentage of total liabilities to total assets?

As a result of extraordinary losses during the year,the number of times bond interest earned ratio decreased from 4.5 times to 1.5 times.This change is indicative of increasing financial strength.

Because the number of shares of common stock outstanding during the year can fluctuate,computing return on common stockholders' equity is not a useful indicator of profitability.

What is the PE ratio? How is it calculated and why is it that the PE ratio for a privately held company often cannot be calculated?

The current ratio is a measure of profitability.

The rate of ____________________ on total assets measures the earnings on the assets used by a company.

If total merchandise available for sale is 72 percent of net sales and cost of goods sold is 64 percent of net sales,gross profit on sales is

The current ratio measures a company's ability to pay its current debts using current assets.

A firm has current liabilities of $60,000,stockholders' equity of $180,000 and total assets of $300,000.The percentage of total liabilities to total assets is

Simon Company has current liabilities of $30,000 and a current ratio of 1.2.Its current assets therefore must equal $25,000.

Peterson Company has current liabilities of $130,000 and working capital of $32,000.Its current assets therefore must equal $162,000.

The rate of return on sales measures how effectively management has used the assets of the company.

Accounting: the Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and the Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporations: Formation and Capital Stock Transactions

Corporate Earnings and Capital Transactions

Long-Term Bonds

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

Cost-Revenue Analysis for Decision Making

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