Question 1

A primary purpose of vertical analysis is to observe trends over a three-year period.

Accepted Answer

A) True 
 B)False

Question 2

A company has an account receivable turnover ratio of 6. The average accounts receivable during the period are $350,000. What is the amount of net sales for the period?

Accepted Answer

A)  $350,000 
B)  $2,100,000 
C)  $58,333 
D)  Cannot be determined from the information given. 
A)  $350,000 
B)  $2,100,000 
C)  $58,333 
D)  Cannot be determined from the information given.

Question 3

If equal amounts are added to the numerator and the denominator of a current ratio equal to one, the ratio will

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain the same. 
D)  equal zero. 
A)  increase. 
B)  decrease. 
C)  remain the same. 
D)  equal zero.

Question 4

In the vertical analysis of a balance sheet, the base for current liabilities is total liabilities.

Accepted Answer

A) True 
 B)False

Question 5

Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time

Accepted Answer

A)  that has been arranged from the highest amount to the lowest amount. 
B)  that has been arranged from lowest amount to the highest amount. 
C)  to determine which items are in error. 
D)  to determine the amount and/or percentage increase or decrease that has taken place. 
A)  that has been arranged from the highest amount to the lowest amount. 
B)  that has been arranged from lowest amount to the highest amount. 
C)  to determine which items are in error. 
D)  to determine the amount and/or percentage increase or decrease that has taken place.

Question 6

Parr Hardware Store had net credit sales of $5,200,000 and cost of goods sold of $4,000,000 for the year. The Accounts Receivable balances at the beginning and end of the year were $600,000 and $700,000, respectively. The accounts receivables turnover was

Accepted Answer

A)  7.4 times. 
B)  8.7 times. 
C)  6.2 times. 
D)  8 times. 
A)  7.4 times. 
B)  8.7 times. 
C)  6.2 times. 
D)  8 times.

Question 7

Short-term creditors are usually most interested in assessing

Accepted Answer

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

Question 8

The ratios that allow investors, creditors, and managers to evaluate the extent to which invested funds are being used efficiently are called ____________.

Accepted Answer

profitabil

Question 9

Figure 16-2.
Financial statements for Grange Company appear below:
     Dividends during 2014 totaled $127,000, of which $5,000 were preferred dividends.
The market price of a share of common stock on December 31, 2014, was $100.
-Refer to Figure 16-2.
Required: Compute the following leverage ratios for 2014:

Accepted Answer

The answer of Figure 16-2.
Financial statements for Grange Company appear...

Question 10

MATCHING
Match the classifications of ratios with each description.
a.
Liquidity Ratio
b.
Leverage Ratio
c.
Profitability Ratio
d.
Horizontal Analysis
e.
Trend Analysis
-An income statement measure of the ability of a company to service its debts

Accepted Answer

The answer of MATCHING
Match the classifications of ratios with each...

Question 11

The inventory turnover is calculated by dividing

Accepted Answer

A)  cost of goods sold by the ending inventory. 
B)  cost of goods sold by the beginning inventory. 
C)  cost of goods sold by the average inventory. 
D)  average inventory by cost of goods sold. 
A)  cost of goods sold by the ending inventory. 
B)  cost of goods sold by the beginning inventory. 
C)  cost of goods sold by the average inventory. 
D)  average inventory by cost of goods sold.

Question 12

Trend analysis is analysis

Accepted Answer

A)  of percentage changes over several years. 
B)  in which all items are presented as a percentage of one selected item on a financial statement. 
C)  in which a statistic is calculated for the relationship between tow items on a single financial statement or for two items on different financial statements. 
D)  of all ratios that increased or decreased over past accounting periods. 
A)  of percentage changes over several years. 
B)  in which all items are presented as a percentage of one selected item on a financial statement. 
C)  in which a statistic is calculated for the relationship between tow items on a single financial statement or for two items on different financial statements. 
D)  of all ratios that increased or decreased over past accounting periods.

Question 13

Which of the following is considered a profitability ratio?

Accepted Answer

A)  earnings per share 
B)  debt ratio 
C)  quick ratio 
D)  inventory turnover ratio 
A)  earnings per share 
B)  debt ratio 
C)  quick ratio 
D)  inventory turnover ratio

Question 14

Winter Corporation has issued common stock only. The company has been successful and has a gross profit rate of 20%. The information shown below was taken from the company's financial statements.
   Required: Compute the following:

Accepted Answer

The answer of Winter Corporation has issued common stock only....

Question 15

The dividend payout ratio is equal to common dividends divided by (Net Income - Preferred Dividends).

Accepted Answer

A) True 
 B)False

Question 16

The ________________ is calculated by dividing total liabilities by total stockholders' equity.

Accepted Answer

debt-to-eq

Question 17

Profitability ratios assess the ability of a company to meets its long- and short-term obligations.

Accepted Answer

A) True 
 B)False

Question 18

A company measures how efficiently it is using its assets by calculating the _______________.

Accepted Answer

The answer of A company measures how efficiently it is...

Question 19

When computing the quick ratio, a short-term note receivable would be included.

Accepted Answer

A) True 
 B)False

Question 20

How long it takes a company to turn its receivables into cash is known as the ________________.

Accepted Answer

accounts r

A primary purpose of vertical analysis is to observe trends over a three-year period.

A company has an account receivable turnover ratio of 6. The average accounts receivable during the period are $350,000. What is the amount of net sales for the period?

If equal amounts are added to the numerator and the denominator of a current ratio equal to one, the ratio will

In the vertical analysis of a balance sheet, the base for current liabilities is total liabilities.

Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time

Parr Hardware Store had net credit sales of $5,200,000 and cost of goods sold of $4,000,000 for the year. The Accounts Receivable balances at the beginning and end of the year were $600,000 and $700,000, respectively. The accounts receivables turnover was

Short-term creditors are usually most interested in assessing

The ratios that allow investors, creditors, and managers to evaluate the extent to which invested funds are being used efficiently are called ____________.

MATCHING Match the classifications of ratios with each description. a. Liquidity Ratio b. Leverage Ratio c. Profitability Ratio d. Horizontal Analysis e. Trend Analysis -An income statement measure of the ability of a company to service its debts

The inventory turnover is calculated by dividing

Trend analysis is analysis

Which of the following is considered a profitability ratio?

Winter Corporation has issued common stock only. The company has been successful and has a gross profit rate of 20%. The information shown below was taken from the company's financial statements. Required: Compute the following:

The dividend payout ratio is equal to common dividends divided by (Net Income - Preferred Dividends).

The ________________ is calculated by dividing total liabilities by total stockholders' equity.

Profitability ratios assess the ability of a company to meets its long- and short-term obligations.

A company measures how efficiently it is using its assets by calculating the _______________.

When computing the quick ratio, a short-term note receivable would be included.

How long it takes a company to turn its receivables into cash is known as the ________________.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Filters

Exam 16: Financial Statement Analysis

A primary purpose of vertical analysis is to observe trends over a three-year period.

A company has an account receivable turnover ratio of 6. The average accounts receivable during the period are $350,000. What is the amount of net sales for the period?

If equal amounts are added to the numerator and the denominator of a current ratio equal to one, the ratio will

In the vertical analysis of a balance sheet, the base for current liabilities is total liabilities.

Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time

Parr Hardware Store had net credit sales of $5,200,000 and cost of goods sold of $4,000,000 for the year. The Accounts Receivable balances at the beginning and end of the year were $600,000 and $700,000, respectively. The accounts receivables turnover was

Short-term creditors are usually most interested in assessing

The ratios that allow investors, creditors, and managers to evaluate the extent to which invested funds are being used efficiently are called ____________.

MATCHING Match the classifications of ratios with each description. a. Liquidity Ratio b. Leverage Ratio c. Profitability Ratio d. Horizontal Analysis e. Trend Analysis -An income statement measure of the ability of a company to service its debts

The inventory turnover is calculated by dividing

Trend analysis is analysis

Which of the following is considered a profitability ratio?

Winter Corporation has issued common stock only. The company has been successful and has a gross profit rate of 20%. The information shown below was taken from the company's financial statements. Required: Compute the following:

The dividend payout ratio is equal to common dividends divided by (Net Income - Preferred Dividends).

The ________________ is calculated by dividing total liabilities by total stockholders' equity.

Profitability ratios assess the ability of a company to meets its long- and short-term obligations.

A company measures how efficiently it is using its assets by calculating the _______________.

When computing the quick ratio, a short-term note receivable would be included.

How long it takes a company to turn its receivables into cash is known as the ________________.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Filters