Question 1

EBITDAR is best described as

Accepted Answer

A)  earnings before income, taxes, depreciation, acquisition and restructuring. 
B)  earnings before interest, taxes, depreciation, amortization, acquisition and restructuring. 
C)  earnings before income, taxes, discounts, acquisition and restructuring. 
D)  equity before interest, taxes, depreciation, amortization, acquisition and restructuring. 
A)  earnings before income, taxes, depreciation, acquisition and restructuring. 
B)  earnings before interest, taxes, depreciation, amortization, acquisition and restructuring. 
C)  earnings before income, taxes, discounts, acquisition and restructuring. 
D)  equity before interest, taxes, depreciation, amortization, acquisition and restructuring.

Question 2

From the year-end financial statements of LuLu Limes (LLL) Ltd.:   The EPS for LLL Ltd.is

Accepted Answer

A)  $1.92. 
B)  $2.00. 
C)  $2.50. 
D)  $3.40. 
A)  $1.92. 
B)  $2.00. 
C)  $2.50. 
D)  $3.40.

Question 3

Common-size analysis involves converting the percentage values in the financial statements to dollar values.

Accepted Answer

A) True 
 B)False

Question 4

Which of the return on investment ratios would be of most interest to the owners of a company?

Accepted Answer

A)  return on assets 
B)  return on interest 
C)  return on debt 
D)  return on equity 
A)  return on assets 
B)  return on interest 
C)  return on debt 
D)  return on equity

Question 5

All of the following measure activity except for

Accepted Answer

A)  accounts receivable turnover. 
B)  inventory turnover. 
C)  equity turnover. 
D)  accounts payable turnover. 
A)  accounts receivable turnover. 
B)  inventory turnover. 
C)  equity turnover. 
D)  accounts payable turnover.

Question 6

Free cash flow is a commonly used non-IFRS financial measure.

Accepted Answer

A) True 
 B)False

Question 7

Trend analysis is used to examine one period of a company's information.

Accepted Answer

A) True 
 B)False

Question 8

An analyst is comparing two companies, a retail bookstore chain and an on-line bookstore. Which of the following activity ratios is most likely significantly higher for the on-line bookstore?

Accepted Answer

A)  accounts receivable turnover 
B)  inventory turnover 
C)  accounts payable turnover 
D)  gross margin 
A)  accounts receivable turnover 
B)  inventory turnover 
C)  accounts payable turnover 
D)  gross margin

Question 9

Return on equity is a measure of performance from management's perspective.

Accepted Answer

A) True 
 B)False

Question 10

Sunco Credit Union is considering granting a loan to Michalski Printing.. Michalski Printing is a commercial printer and, in anticipation of a major sales increase expected in the coming year, has applied for a one-year loan of $100,000 to finance an expansion of its inventory. The following excerpts are from Michalski's 2020 Statement of Financial Position:   Instructions 
a) Calculate the following ratios for Michalski for the years ended December 31, 2019, and 2020:
i. Current ratio
ii. Quick ratio
b) Based on your calculations, comment on whether you would recommend granting the loan.
c) What steps should you undertake before making your decision and is there other information you would like to have?

Accepted Answer

a) i. Current Ratio = Current Assets/Cur

Question 11

Ratios exhibit the relationship between figures from year to year and the reason for the changes year to year.

Accepted Answer

A) True 
 B)False

Question 12

Product differentiation strategy is to

Accepted Answer

A)  provide superior service at a premium price. 
B)  provide superior service at a low price. 
C)  provide regular service at a low price. 
D)  provide regular service at a high price. 
A)  provide superior service at a premium price. 
B)  provide superior service at a low price. 
C)  provide regular service at a low price. 
D)  provide regular service at a high price.

Question 13

Prospective analysis is known as a forward-looking analysis.

Accepted Answer

A) True 
 B)False

Question 14

The audit report guarantees the accuracy of financial information contained in the financial statements.

Accepted Answer

A) True 
 B)False

Question 15

BNI Corporation has just received an unqualified audit opinion from the company's external auditor. As the internal CPA, you have been asked by your management team what this means and what the implications of this are?

Accepted Answer

This is good news for BNI. An unqualifie

Question 16

Listed below are the names and formulas for various financial ratios. Match the formulas to the ratio names by placing the appropriate letter in the space provided.

Accepted Answer

The answer of Listed below are the names and formulas...

Question 17

Ratios are more conclusive than attention directing.

Accepted Answer

A) True 
 B)False

Question 18

It is important that the conclusion of an analysis differentiates between factual results and the analysts' opinion.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following descriptions best describes trend analysis?

Accepted Answer

A)  converting dollar values on the financial statements to percentages of a specific base amount 
B)  comparing data from one company to with those of another company over the same period 
C)  examining company information from multiple periods 
D)  using historical information as a basis for predicting future outcomes 
A)  converting dollar values on the financial statements to percentages of a specific base amount 
B)  comparing data from one company to with those of another company over the same period 
C)  examining company information from multiple periods 
D)  using historical information as a basis for predicting future outcomes

Question 20

The current ratio should normally be 1.0 or less.

Accepted Answer

A) True 
 B)False

EBITDAR is best described as

From the year-end financial statements of LuLu Limes (LLL) Ltd.: The EPS for LLL Ltd.is

Common-size analysis involves converting the percentage values in the financial statements to dollar values.

Which of the return on investment ratios would be of most interest to the owners of a company?

All of the following measure activity except for

Free cash flow is a commonly used non-IFRS financial measure.

Trend analysis is used to examine one period of a company's information.

An analyst is comparing two companies, a retail bookstore chain and an on-line bookstore. Which of the following activity ratios is most likely significantly higher for the on-line bookstore?

Return on equity is a measure of performance from management's perspective.

Ratios exhibit the relationship between figures from year to year and the reason for the changes year to year.

Product differentiation strategy is to

Prospective analysis is known as a forward-looking analysis.

The audit report guarantees the accuracy of financial information contained in the financial statements.

BNI Corporation has just received an unqualified audit opinion from the company's external auditor. As the internal CPA, you have been asked by your management team what this means and what the implications of this are?

Listed below are the names and formulas for various financial ratios. Match the formulas to the ratio names by placing the appropriate letter in the space provided.

Ratios are more conclusive than attention directing.

It is important that the conclusion of an analysis differentiates between factual results and the analysts' opinion.

Which of the following descriptions best describes trend analysis?

The current ratio should normally be 1.0 or less.

Overview of Corporate Financial Reporting

Analyzing Transaction and Their Effect on Financial Statement

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Inventory

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Shareholders Equity

Filters

Exam 12: Financial Statement Analysis

EBITDAR is best described as

From the year-end financial statements of LuLu Limes (LLL) Ltd.: The EPS for LLL Ltd.is

Common-size analysis involves converting the percentage values in the financial statements to dollar values.

Which of the return on investment ratios would be of most interest to the owners of a company?

All of the following measure activity except for

Free cash flow is a commonly used non-IFRS financial measure.

Trend analysis is used to examine one period of a company's information.

An analyst is comparing two companies, a retail bookstore chain and an on-line bookstore. Which of the following activity ratios is most likely significantly higher for the on-line bookstore?

Return on equity is a measure of performance from management's perspective.

Ratios exhibit the relationship between figures from year to year and the reason for the changes year to year.

Product differentiation strategy is to

Prospective analysis is known as a forward-looking analysis.

The audit report guarantees the accuracy of financial information contained in the financial statements.

BNI Corporation has just received an unqualified audit opinion from the company's external auditor. As the internal CPA, you have been asked by your management team what this means and what the implications of this are?

Listed below are the names and formulas for various financial ratios. Match the formulas to the ratio names by placing the appropriate letter in the space provided.

Ratios are more conclusive than attention directing.

It is important that the conclusion of an analysis differentiates between factual results and the analysts' opinion.

Which of the following descriptions best describes trend analysis?

The current ratio should normally be 1.0 or less.

Overview of Corporate Financial Reporting

Analyzing Transaction and Their Effect on Financial Statement

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Inventory

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Shareholders Equity

Filters