Exam 13: Financial Statement Analysis

The Statement of Cash Flows for Brown Equipment Company shows purchases of plant assets of $155,000 for 2017 and $118,000 for 2018. The percent of change from 2017 to 2018 is ________.

When computing trend percentages:

The amount of a company's net income earned for each share of its outstanding common stock is termed the:

The primary focus of horizontal analysis is:

A financial statement line item expressed as a percentage of a base amount is a result of:

A high inventory turnover may indicate that a company is experiencing difficulty selling its inventory.

On a statement of cash flows, which of the following is a sign of a healthy company?

If a corporation's economic value added (EVA®)is negative, stockholders will probably be pleased with the company's management and want to buy additional shares of stock.

In performing vertical analysis, the base for income tax expense is:

On a statement of cash flows, which is considered an investing activity?

Which of the following statements about financial ratios is FALSE?

A company's debt ratio is computed as total assets minus total liabilities divided by total assets.

Analysts may find the statement of cash flows as helpful for spotting weakness as for gauging success.

Trend percentages are a form of horizontal analysis that are computed only for balance sheet items.

Analyzing the statement of cash flows may help investors and analysts determine the financial health of a company. Which of the following signs below is NOT an indicator of a financially healthy company?

A company reports the following information from the statement of cash flows: Which line item provides a signal that the company may have cash flow problems?

The cost of capital is defined as the:

In 2016, the Zenon Company reported that property, plant and equipment were equal to 13% of total assets. In 2016, current assets were equal to 87% of total assets. In 2017 the company reported that property, plant and equipment were equal to 28% of total assets. In 2017, current assets were equal to 72% of total assets. What conclusion can be reached from this information?

The leverage ratio measures:

When performing a vertical analysis of the income statement, each line item is stated as a percentage of net income.