Question 1

Annual cash dividends per share divided by market price per share is the:

Accepted Answer

A) Profit margin. 
B) Price-dividends ratio. 
C) Price-earnings ratio. 
D) Dividend yield ratio. 
E) Earnings per share. 
A) Profit margin. 
B) Price-dividends ratio. 
C) Price-earnings ratio. 
D) Dividend yield ratio. 
E) Earnings per share.

Question 2

Refer to the following selected financial information from McCormik, LLC. Compute the company's accounts receivable turnover for Year 2. $\begin{array}{|l|r|r|}
\hline & \text { Year 2 } & {\text { Year 1 }} \
\hline \text { Cash } & \$ 37,500 & 36,850 \
\hline \text { Short-term investments } & 90,000 & 90,000 \
\hline \text { Accounts receivable, net } & 85,500 & 86,250 \
\hline \text { Merchandise inventory } & 121,000 & 117,000 \\hline \text { Prepaid expenses } & 12,100 & 13,500 \
\hline \text { Plant assets } & 388,000 & 392,000 \
\hline \text { Accounts payable } & 113,400 & 111.750 \
\hline \text { Net sales } & 711,000 & 706,000 \
\hline \text { Cost of goods sold } & 390,000 & 385,500 \
\hline
\end{array}$

Accepted Answer

A) 8.28. 
B) 8.94. 
C) 8.62. 
D) 7.90. 
E) 5.78. 
A) 8.28. 
B) 8.94. 
C) 8.62. 
D) 7.90. 
E) 5.78.

Question 3

Financial statements with data for two or more successive accounting periods placed in columns side by side, sometimes with changes shown in both dollar amounts and percentages, are referred to as:

Accepted Answer

A) Comparative statements. 
B) Successive statements. 
C) Controlling statements. 
D) Period-to-period statements. 
E) Serial statements. 
A) Comparative statements. 
B) Successive statements. 
C) Controlling statements. 
D) Period-to-period statements. 
E) Serial statements.

Question 4

Internal users of accounting information make the strategic and operating decisions of a company.

Accepted Answer

A) True 
 B)False

Question 5

Match between columns
                        Premises: The comparison of a company's financial condition and performance to a base amount.
Examination of financial data across time.
A company's ability to generate positive market expectations.
A company's ability to provide financial rewards sufficient to attract and retain capital.
A company's ability to generate future revenues and meet long-term obligations.
A statement where each amount is expressed as a percent of a base amount to reveal the relative importance of each financial statement item.
A statement with data for two or more successive accounting periods placed in side-by-side columns, often with changes shown in dollar amounts and percentages.
The availability of resources to meet short-term obligations and to efficiently generate revenues.
The application of analytical tools to general-purpose financial statements and related data for making business decisions.
A measure of solvency presented as the ratio of total liabilities to total equity.

Accepted Answer

The Answer of Liquidity and efficiency and Debt to equity is...

Question 6

Yeats Corporation's sales in Year 1 were $396,000 and in Year 2 were $380,000. Using Year 1 as the base year, the percent change for Year 2 compared to the base year is:

Accepted Answer

A) 4.2% 
B) -104% 
C) -4% 
D) 96% 
E) 100% 
A) 4.2% 
B) -104% 
C) -4% 
D) 96% 
E) 100%

Question 7

Refer to the following selected financial information from Shakley's Incorporated. Compute the company's profit margin for Year 2. $\begin{array}{|l|r|r|}
\hline & \text { Year 2 } & \text { Year 1 } \
\hline \text { Net sales } & \$ 478,500 & \$ 426,250 \
\hline \text { Cost of goods sold } & 276,300 & 250,120 \
\hline \text { Interest expense } & 9,700 & 10,700 \
\hline \text { Net income before tax } & 67,250 & 52,680 \\hline \text { Net income after tax } & 46,050 & 39,900 \
\hline \text { Total assets } & 317,100 & 288,000 \
\hline \text { Total liabilities } & 181,400 & 167,300 \
\hline \text { Total equity } & 135,700 & 120,700 \
\hline
\end{array}$

Accepted Answer

A) 14.1%. 
B) 33.9%. 
C) 11.7%. 
D) 9.6%. 
E) 16.7%. 
A) 14.1%. 
B) 33.9%. 
C) 11.7%. 
D) 9.6%. 
E) 16.7%.

Question 8

In horizontal analysis the percent change is computed by:

Accepted Answer

A) Subtracting the base period amount from the analysis amount, then dividing the result by the analysis period amount. 
B) Subtracting the analysis period amount from the base period amount. 
C) Subtracting the base period amount from the analysis period amount. 
D) Subtracting the analysis period amount from the base period amount, dividing the result by the base period amount, then multiplying that amount by 100. 
E) Subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, then multiplying that amount by 100. 
A) Subtracting the base period amount from the analysis amount, then dividing the result by the analysis period amount. 
B) Subtracting the analysis period amount from the base period amount. 
C) Subtracting the base period amount from the analysis period amount. 
D) Subtracting the analysis period amount from the base period amount, dividing the result by the base period amount, then multiplying that amount by 100. 
E) Subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, then multiplying that amount by 100.

Question 9

A company's sales in Year 1 were $250,000 and in Year 2 were $287,500. Using Year 1 as the base year, the percent change for Year 2 compared to the base year is:

Accepted Answer

A) 100%. 
B) 13%. 
C) 15%. 
D) 87%. 
E) 115%. 
A) 100%. 
B) 13%. 
C) 15%. 
D) 87%. 
E) 115%.

Question 10

Selected current year company information follows:
$\begin{array}{l|r}
\text { Net income } & \$ 15,953 \
\hline \text { Net sales } & 712,855 \
\hline \text { Total liabilities, beginning-year } & 83,932 \
\hline \text { Total liabilities, end-of-year } & 103,201 \\hline \text { Total stockholders' equity, beginning-year } & 198,935 \
\hline \text { Total stockholders' equity, end-of-year } & 121,851\

\end{array}$
The return on total assets is:

Accepted Answer

A) 2.81% 
B) 3.64% 
C) 6.28% 
D) 4.67% 
E) 2.24% 
A) 2.81% 
B) 3.64% 
C) 6.28% 
D) 4.67% 
E) 2.24%

Question 11

Efficiency refers to how productive a company is in using its assets, and is usually measured relative to how much revenue is generated from a certain level of assets.

Accepted Answer

A) True 
 B)False

Question 12

Zhang Company reported Cost of goods sold of $835,000 and ending Inventory of $41,750. The Days' sales in inventory (rounded to whole days)is:

Accepted Answer

A) 18 days. 
B) 20 days. 
C) 418 days. 
D) 10 days. 
E) 56 days. 
A) 18 days. 
B) 20 days. 
C) 418 days. 
D) 10 days. 
E) 56 days.

Question 13

Intra-company standards for financial statement analysis:

Accepted Answer

A) Are set by the company's industry through published statistics. 
B) Are often set by competitors. 
C) Are published by analyst services such as Standard & Poor's. 
D) Are based on a company's prior performance and relations between its financial items. 
E) Are based on rules of thumb. 
A) Are set by the company's industry through published statistics. 
B) Are often set by competitors. 
C) Are published by analyst services such as Standard & Poor's. 
D) Are based on a company's prior performance and relations between its financial items. 
E) Are based on rules of thumb.

Question 14

Comparative financial statements are reports that show financial amounts in side by side columns on a single statement for analysis purposes.

Accepted Answer

A) True 
 B)False

Question 15

Vertical analysis is used to reveal patterns in data covering two or more successive periods.

Accepted Answer

A) True 
 B)False

Question 16

Three of the most common tools of financial analysis include horizontal analysis, vertical analysis, and ratio analysis.

Accepted Answer

A) True 
 B)False

Question 17

Analysis of a single financial number is often of limited value.

Accepted Answer

A) True 
 B)False

Question 18

If a company is comparing this year's financial performance to last year's financial performance, it is using horizontal analysis.

Accepted Answer

A) True 
 B)False

Question 19

The base amount for a common-size balance sheet is usually total assets.

Accepted Answer

A) True 
 B)False

Question 20

Refer to the following selected financial information from Dodge Company. Compute the company's acid-test ratio. $\begin{array}{|l|r|}\hline\
\hline \text { Cash } & \$ 42,250 \
\hline \text { Short-term investments } & 60,000 \
\hline \text { Accounts receivable, net } & 79,500 \
\hline \text { Merchandise inventory } & 115,000 \
\hline \text { Prepaid expenses } & 9,700 \
\hline \text { Accounts payable } & 111,400\\hline
\end{array}$

Accepted Answer

A) 1.12. 
B) 0.92. 
C) 2.75. 
D) 1.63. 
E) 2.66. 
A) 1.12. 
B) 0.92. 
C) 2.75. 
D) 1.63. 
E) 2.66.

Annual cash dividends per share divided by market price per share is the:

Financial statements with data for two or more successive accounting periods placed in columns side by side, sometimes with changes shown in both dollar amounts and percentages, are referred to as:

Internal users of accounting information make the strategic and operating decisions of a company.

Yeats Corporation's sales in Year 1 were $396,000 and in Year 2 were $380,000. Using Year 1 as the base year, the percent change for Year 2 compared to the base year is:

In horizontal analysis the percent change is computed by:

A company's sales in Year 1 were $250,000 and in Year 2 were $287,500. Using Year 1 as the base year, the percent change for Year 2 compared to the base year is:

Selected current year company information follows: Net income \ 15,953 Net sales 712,855 Total liabilities, beginning-year 83,932 Total liabilities, end-of-year 103,201 Total stockholders' equity, beginning-year 198,935 Total stockholders' equity, end-of-year 121,851 The return on total assets is:

Efficiency refers to how productive a company is in using its assets, and is usually measured relative to how much revenue is generated from a certain level of assets.

Zhang Company reported Cost of goods sold of $835,000 and ending Inventory of $41,750. The Days' sales in inventory (rounded to whole days)is:

Intra-company standards for financial statement analysis:

Comparative financial statements are reports that show financial amounts in side by side columns on a single statement for analysis purposes.

Vertical analysis is used to reveal patterns in data covering two or more successive periods.

Three of the most common tools of financial analysis include horizontal analysis, vertical analysis, and ratio analysis.

Analysis of a single financial number is often of limited value.

If a company is comparing this year's financial performance to last year's financial performance, it is using horizontal analysis.

The base amount for a common-size balance sheet is usually total assets.

Refer to the following selected financial information from Dodge Company. Compute the company's acid-test ratio. Cash \ 42,250 Short-term investments 60,000 Accounts receivable, net 79,500 Merchandise inventory 115,000 Prepaid expenses 9,700 Accounts payable 111,400

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Filters

Exam 17: Analysis of Financial Statements

Annual cash dividends per share divided by market price per share is the:

Financial statements with data for two or more successive accounting periods placed in columns side by side, sometimes with changes shown in both dollar amounts and percentages, are referred to as:

Internal users of accounting information make the strategic and operating decisions of a company.

Yeats Corporation's sales in Year 1 were $396,000 and in Year 2 were $380,000. Using Year 1 as the base year, the percent change for Year 2 compared to the base year is:

In horizontal analysis the percent change is computed by:

A company's sales in Year 1 were $250,000 and in Year 2 were $287,500. Using Year 1 as the base year, the percent change for Year 2 compared to the base year is:

Selected current year company information follows: Net income \ 15,953 Net sales 712,855 Total liabilities, beginning-year 83,932 Total liabilities, end-of-year 103,201 Total stockholders' equity, beginning-year 198,935 Total stockholders' equity, end-of-year 121,851 The return on total assets is:

Efficiency refers to how productive a company is in using its assets, and is usually measured relative to how much revenue is generated from a certain level of assets.

Zhang Company reported Cost of goods sold of $835,000 and ending Inventory of $41,750. The Days' sales in inventory (rounded to whole days)is:

Intra-company standards for financial statement analysis:

Comparative financial statements are reports that show financial amounts in side by side columns on a single statement for analysis purposes.

Vertical analysis is used to reveal patterns in data covering two or more successive periods.

Three of the most common tools of financial analysis include horizontal analysis, vertical analysis, and ratio analysis.

Analysis of a single financial number is often of limited value.

If a company is comparing this year's financial performance to last year's financial performance, it is using horizontal analysis.

The base amount for a common-size balance sheet is usually total assets.

Refer to the following selected financial information from Dodge Company. Compute the company's acid-test ratio. Cash \ 42,250 Short-term investments 60,000 Accounts receivable, net 79,500 Merchandise inventory 115,000 Prepaid expenses 9,700 Accounts payable 111,400

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Filters