Question 1

Profitability ratios are frequently used as a basis for evaluating management's operating effectiveness.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) 8.6% 
B) 10.0% 
C) 17.1% 
D) 31.6% 
A) 8.6% 
B) 10.0% 
C) 17.1% 
D) 31.6%

Question 3

Use the following information for questions 
During 2013, Pattar Corp reported after-tax profit of $450,000 and paid $75,000 in common dividends. The weighted average number of common shares issued in 2013 was 150,000. There are no preferred shares issued. At year end, Pattar's common shares are selling for $60 per share on the Toronto Stock Exchange.
-Pattar's price-earnings ratio is

Accepted Answer

A) 120 times. 
B) 24 times. 
C) 20 times. 
D) 3 times. 
A) 120 times. 
B) 24 times. 
C) 20 times. 
D) 3 times.

Question 4

Use the following information for questions .  
-In performing a vertical analysis, the percentage for cost of goods sold is

Accepted Answer

A) 4.4%. 
B) 40.0%. 
C) 44.4%. 
D) 400.0%. 
A) 4.4%. 
B) 40.0%. 
C) 44.4%. 
D) 400.0%.

Question 5

An investor interested in purchasing a company's shares for their income potential would be more interested in the company's dividend yield and payout ratios than its price-earnings ratio.

Accepted Answer

A) True 
 B)False

Question 6

Net sales are $2,700,000, beginning total assets are $750,000, and the asset turnover is 3.0. What is the ending total assets?

Accepted Answer

A) $600,000 
B) $900,000 
C) $1,050,000 
D) $1,125,000 
A) $600,000 
B) $900,000 
C) $1,050,000 
D) $1,125,000

Question 7

The gain (loss) on disposal of a discontinued operation is not reported on the income statement.

Accepted Answer

A) True 
 B)False

Question 8

Use the following information to answer questions 
Green Thumb Garden Supplies reported the following information for 2012 and 2013.  
-What is the return on common shareholders' equity for 2013?

Accepted Answer

A) 4.5% 
B) 17.1% 
C) 18.5% 
D) 20.0% 
A) 4.5% 
B) 17.1% 
C) 18.5% 
D) 20.0%

Question 9

Use the following information for questions .  
-In performing a vertical analysis, the percentage for accounts receivable is

Accepted Answer

A) 0.5%. 
B) 1.0%. 
C) 5.0%. 
D) 10.0%. 
A) 0.5%. 
B) 1.0%. 
C) 5.0%. 
D) 10.0%.

Question 10

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

Accepted Answer

A) 2.0:1 
B) 1.7:1 
C) 1.6:1 
D) 0.6:1 
A) 2.0:1 
B) 1.7:1 
C) 1.6:1 
D) 0.6:1

Question 11

In horizontal analysis, the percentage of a base-period amount is calculated by

Accepted Answer

A) dividing the analysis period amount by the base period amount. 
B) dividing the dollar amount of the change since the base period by the base period amount. 
C) dividing the item under analysis by net sales. 
D) dividing the item under analysis by total assets. 
A) dividing the analysis period amount by the base period amount. 
B) dividing the dollar amount of the change since the base period by the base period amount. 
C) dividing the item under analysis by net sales. 
D) dividing the item under analysis by total assets.

Question 12

Use the following information for questions 
During 2013, Pattar Corp reported after-tax profit of $450,000 and paid $75,000 in common dividends. The weighted average number of common shares issued in 2013 was 150,000. There are no preferred shares issued. At year end, Pattar's common shares are selling for $60 per share on the Toronto Stock Exchange.
-Pattar's earnings per share for 2013 is

Accepted Answer

A) $25.00. 
B) $20.00. 
C) $3.00. 
D) $2.50. 
A) $25.00. 
B) $20.00. 
C) $3.00. 
D) $2.50.

Question 13

In an income statement analyzed vertically, each item is expressed as a percentage of profit.

Accepted Answer

A) True 
 B)False

Question 14

Liquidity ratios measure the ability of the company to survive over a long period of time.

Accepted Answer

A) True 
 B)False

Question 15

A successful grocery store would probably have

Accepted Answer

A) a low inventory turnover. 
B) a high inventory turnover. 
C) zero profit margin. 
D) low volume. 
A) a low inventory turnover. 
B) a high inventory turnover. 
C) zero profit margin. 
D) low volume.

Question 16

Long-term creditors are usually most interested in evaluating

Accepted Answer

A) liquidity. 
B) marketability. 
C) profitability. 
D) solvency. 
A) liquidity. 
B) marketability. 
C) profitability. 
D) solvency.

Question 17

The discontinued operations section of the income statement refers to

Accepted Answer

A) discontinuance of a product line. 
B) the profit or loss on products that have been completed and sold. 
C) sale of obsolete equipment and discontinued inventory items. 
D) the disposal of a major line of business or major geographical area of operations. 
A) discontinuance of a product line. 
B) the profit or loss on products that have been completed and sold. 
C) sale of obsolete equipment and discontinued inventory items. 
D) the disposal of a major line of business or major geographical area of operations.

Question 18

An assessment of liquidity can be done based on only one ratio, such as the current ratio or the receivables ratio.

Accepted Answer

A) True 
 B)False

Question 19

The current ratio should not be interpreted on its own without also looking at the receivables turnover and inventory turnover ratios.

Accepted Answer

A) True 
 B)False

Question 20

Some of the ratios that are used to determine a company's short-term debt paying ability are

Accepted Answer

A) asset turnover, times interest earned, current ratio, and receivables turnover. 
B) times interest earned, inventory turnover, current ratio, and receivables turnover. 
C) times interest earned, current ratio, and inventory turnover. 
D) current ratio, receivables turnover, and inventory turnover. 
A) asset turnover, times interest earned, current ratio, and receivables turnover. 
B) times interest earned, inventory turnover, current ratio, and receivables turnover. 
C) times interest earned, current ratio, and inventory turnover. 
D) current ratio, receivables turnover, and inventory turnover.

Profitability ratios are frequently used as a basis for evaluating management's operating effectiveness.

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

Use the following information for questions . -In performing a vertical analysis, the percentage for cost of goods sold is

An investor interested in purchasing a company's shares for their income potential would be more interested in the company's dividend yield and payout ratios than its price-earnings ratio.

Net sales are $2,700,000, beginning total assets are $750,000, and the asset turnover is 3.0. What is the ending total assets?

The gain (loss) on disposal of a discontinued operation is not reported on the income statement.

Use the following information to answer questions Green Thumb Garden Supplies reported the following information for 2012 and 2013. -What is the return on common shareholders' equity for 2013?

Use the following information for questions . -In performing a vertical analysis, the percentage for accounts receivable is

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

In horizontal analysis, the percentage of a base-period amount is calculated by

In an income statement analyzed vertically, each item is expressed as a percentage of profit.

Liquidity ratios measure the ability of the company to survive over a long period of time.

A successful grocery store would probably have

Long-term creditors are usually most interested in evaluating

The discontinued operations section of the income statement refers to

An assessment of liquidity can be done based on only one ratio, such as the current ratio or the receivables ratio.

The current ratio should not be interpreted on its own without also looking at the receivables turnover and inventory turnover ratios.

Some of the ratios that are used to determine a company's short-term debt paying ability are

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

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Exam 14: Performance Measurement

Profitability ratios are frequently used as a basis for evaluating management's operating effectiveness.

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

Use the following information for questions . -In performing a vertical analysis, the percentage for cost of goods sold is

An investor interested in purchasing a company's shares for their income potential would be more interested in the company's dividend yield and payout ratios than its price-earnings ratio.

Net sales are $2,700,000, beginning total assets are $750,000, and the asset turnover is 3.0. What is the ending total assets?

The gain (loss) on disposal of a discontinued operation is not reported on the income statement.

Use the following information to answer questions Green Thumb Garden Supplies reported the following information for 2012 and 2013. -What is the return on common shareholders' equity for 2013?

Use the following information for questions . -In performing a vertical analysis, the percentage for accounts receivable is

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

In horizontal analysis, the percentage of a base-period amount is calculated by

In an income statement analyzed vertically, each item is expressed as a percentage of profit.

Liquidity ratios measure the ability of the company to survive over a long period of time.

A successful grocery store would probably have

Long-term creditors are usually most interested in evaluating

The discontinued operations section of the income statement refers to

An assessment of liquidity can be done based on only one ratio, such as the current ratio or the receivables ratio.

The current ratio should not be interpreted on its own without also looking at the receivables turnover and inventory turnover ratios.

Some of the ratios that are used to determine a company's short-term debt paying ability are

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