Question 1

The return on common shareholders' equity ratio is affected by the

Accepted Answer

A) gross profit margin and profit margin ratio. 
B) profit margin and free cash flow. 
C) times interest earned and debt to total assets ratios. 
D) return on assets and debt to total assets ratios. 
A) gross profit margin and profit margin ratio. 
B) profit margin and free cash flow. 
C) times interest earned and debt to total assets ratios. 
D) return on assets and debt to total assets ratios.

Question 2

Vertical analysis is a technique for evaluating a series of financial statement data over a period of time to determine the increase (decrease) that has taken place.

Accepted Answer

A) True 
 B)False

Question 3

Free cash flow is calculated as

Accepted Answer

A) profit minus net capital expenditures minus dividends paid. 
B) profit minus dividends paid. 
C) net cash provided (used)by operating activities minus net capital expenditures minus dividends paid. 
D) net cash provided (used)by investing activities minus net capital expenditures minus dividends paid. 
A) profit minus net capital expenditures minus dividends paid. 
B) profit minus dividends paid. 
C) net cash provided (used)by operating activities minus net capital expenditures minus dividends paid. 
D) net cash provided (used)by investing activities minus net capital expenditures minus dividends paid.

Question 4

From a creditor's point of view, the higher the debt to total assets ratio, the lower the risk that the company may be unable to pay its obligations.

Accepted Answer

A) True 
 B)False

Question 5

The price-earnings ratio reflects investors' expectations about the future profitability of the company.

Accepted Answer

A) True 
 B)False

Question 6

Summer Fashions had a balance in the Accounts Receivable account of $660,000 at the beginning of the year and a balance of $720,000 at the end of the year. Net credit sales during the year were $5,350,000. The average collection period of the receivables was

Accepted Answer

A) 45 days. 
B) 47 days. 
C) 49 days. 
D) 93 days. 
A) 45 days. 
B) 47 days. 
C) 49 days. 
D) 93 days.

Question 7

All of the following profitability ratios relate more to the needs of investors than corporations except for

Accepted Answer

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

Question 8

A solvency ratio measures the profit or operating success of a company for a given period of time.

Accepted Answer

A) True 
 B)False

Question 9

In horizontal analysis, if an item has a negative amount in the base year, and a positive amount in the following year, no percentage change for that item can be calculated.

Accepted Answer

A) True 
 B)False

Question 10

Comparisons of financial data made within a company are called

Accepted Answer

A) intracompany comparisons. 
B) interior comparisons. 
C) intercompany comparisons. 
D) intramural comparisons. 
A) intracompany comparisons. 
B) interior comparisons. 
C) intercompany comparisons. 
D) intramural comparisons.

Question 11

Which one of the following ratios would not likely be used by a short-term creditor in evaluating whether to sell on credit to a company?

Accepted Answer

A) Current ratio 
B) Dividend yield 
C) Asset turnover 
D) Receivables turnover 
A) Current ratio 
B) Dividend yield 
C) Asset turnover 
D) Receivables turnover

Question 12

In vertical analysis

Accepted Answer

A) a base amount is required. 
B) a base amount is optional. 
C) the same base is used across all financial statements being analyzed. 
D) the results of the horizontal analysis are necessary inputs for vertical analysis. 
A) a base amount is required. 
B) a base amount is optional. 
C) the same base is used across all financial statements being analyzed. 
D) the results of the horizontal analysis are necessary inputs for vertical analysis.

Question 13

Gifford Limited reported the following on its income statement:   Interest expense was $60,000. Gifford's times interest earned was

Accepted Answer

A) 11 times. 
B) 10 times. 
C) 7 times. 
D) 3 times. 
A) 11 times. 
B) 10 times. 
C) 7 times. 
D) 3 times.

Question 14

The inventory turnover ratio is a measure of liquidity that focuses on efficient use of inventory.

Accepted Answer

A) True 
 B)False

Question 15

Consider the following information:   The dividend yield is

Accepted Answer

A) 1.5%. 
B) 6.2%. 
C) 8.6%. 
D) 50.0%. 
A) 1.5%. 
B) 6.2%. 
C) 8.6%. 
D) 50.0%.

Question 16

The current ratio is a

Accepted Answer

A) liquidity ratio. 
B) profitability ratio. 
C) solvency ratio. 
D) cash flow ratio. 
A) liquidity ratio. 
B) profitability ratio. 
C) solvency ratio. 
D) cash flow ratio.

Question 17

The first step in any comprehensive analysis is to perform a horizontal and vertical analysis.

Accepted Answer

A) True 
 B)False

Question 18

In horizontal analysis, the base year is the most current year being examined.

Accepted Answer

A) True 
 B)False

Question 19

Assets and liabilities of a discontinued operation are reported on the statement of financial position at fair value.

Accepted Answer

A) True 
 B)False

Question 20

Use the following information to answer questions 
Green Thumb Garden Supplies reported the following information for 2012 and 2013.  
-What is the dividend yield for 2013?

Accepted Answer

A) 2.3% 
B) 4.4% 
C) 9.0% 
D) 12.5% 
A) 2.3% 
B) 4.4% 
C) 9.0% 
D) 12.5%

The return on common shareholders' equity ratio is affected by the

Vertical analysis is a technique for evaluating a series of financial statement data over a period of time to determine the increase (decrease) that has taken place.

Free cash flow is calculated as

From a creditor's point of view, the higher the debt to total assets ratio, the lower the risk that the company may be unable to pay its obligations.

The price-earnings ratio reflects investors' expectations about the future profitability of the company.

Summer Fashions had a balance in the Accounts Receivable account of $660,000 at the beginning of the year and a balance of $720,000 at the end of the year. Net credit sales during the year were $5,350,000. The average collection period of the receivables was

All of the following profitability ratios relate more to the needs of investors than corporations except for

A solvency ratio measures the profit or operating success of a company for a given period of time.

In horizontal analysis, if an item has a negative amount in the base year, and a positive amount in the following year, no percentage change for that item can be calculated.

Comparisons of financial data made within a company are called

Which one of the following ratios would not likely be used by a short-term creditor in evaluating whether to sell on credit to a company?

In vertical analysis

Gifford Limited reported the following on its income statement: Interest expense was $60,000. Gifford's times interest earned was

The inventory turnover ratio is a measure of liquidity that focuses on efficient use of inventory.

Consider the following information: The dividend yield is

The current ratio is a

The first step in any comprehensive analysis is to perform a horizontal and vertical analysis.

In horizontal analysis, the base year is the most current year being examined.

Assets and liabilities of a discontinued operation are reported on the statement of financial position at fair value.

Use the following information to answer questions Green Thumb Garden Supplies reported the following information for 2012 and 2013. -What is the dividend yield for 2013?

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Filters

Exam 14: Performance Measurement

The return on common shareholders' equity ratio is affected by the

Vertical analysis is a technique for evaluating a series of financial statement data over a period of time to determine the increase (decrease) that has taken place.

Free cash flow is calculated as

From a creditor's point of view, the higher the debt to total assets ratio, the lower the risk that the company may be unable to pay its obligations.

The price-earnings ratio reflects investors' expectations about the future profitability of the company.

Summer Fashions had a balance in the Accounts Receivable account of $660,000 at the beginning of the year and a balance of $720,000 at the end of the year. Net credit sales during the year were $5,350,000. The average collection period of the receivables was

All of the following profitability ratios relate more to the needs of investors than corporations except for

A solvency ratio measures the profit or operating success of a company for a given period of time.

In horizontal analysis, if an item has a negative amount in the base year, and a positive amount in the following year, no percentage change for that item can be calculated.

Comparisons of financial data made within a company are called

Which one of the following ratios would not likely be used by a short-term creditor in evaluating whether to sell on credit to a company?

In vertical analysis

Gifford Limited reported the following on its income statement: Interest expense was $60,000. Gifford's times interest earned was

The inventory turnover ratio is a measure of liquidity that focuses on efficient use of inventory.

Consider the following information: The dividend yield is

The current ratio is a

The first step in any comprehensive analysis is to perform a horizontal and vertical analysis.

In horizontal analysis, the base year is the most current year being examined.

Assets and liabilities of a discontinued operation are reported on the statement of financial position at fair value.

Use the following information to answer questions Green Thumb Garden Supplies reported the following information for 2012 and 2013. -What is the dividend yield for 2013?

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Filters