Question 1

In the profitability analysis model ROS is multiplied by asset turnover to calculate ROE.

Accepted Answer

A) True 
 B)False  False

Question 2

Limitations of financial ratio analysis may include which of the following?

Accepted Answer

A)  Cash basis of accounting is used to prepare the income statement 
B)  Market values are used to value assets on the balance sheet 
C)  Balance sheets are not prepared at the same time each year 
D)  All of the above 
A)  Cash basis of accounting is used to prepare the income statement 
B)  Market values are used to value assets on the balance sheet 
C)  Balance sheets are not prepared at the same time each year 
D)  All of the above D

Question 3

Ratios used to evaluate efficiency in the collection of accounts receivable include

Accepted Answer

A)  Days sales in accounts receivable 
B)  Percentage change in credit sales 
C)  Bad debts as a percentage of credit sales 
D)  All of the above 
A)  Days sales in accounts receivable 
B)  Percentage change in credit sales 
C)  Bad debts as a percentage of credit sales 
D)  All of the above D

Question 4

Given the following balance sheet information, what is the quick ratio?
$\begin{array}{lrlc}
\text { Cash } & \$ 50,000 & \text { Accounts payable } & \$ 50,000 \
\text { Inventory } & 50,000 & \text { Accrued expenses } & 25,000 \
\text { Accounts receivable } & \underline {50,000} & \text { Short-term loan } & \underline {25,000} \
\text { Total Current Assets } & \$ 150,000 & \text { Total Current Liabilities } & \$ 100,000
\end{array}$

Accepted Answer

A)  0.5 
B)  1.0 
C)  1.5 
D)  None of the above 
A)  0.5 
B)  1.0 
C)  1.5 
D)  None of the above

Question 5

Interest expense is subtracted from net income before interest when calculating the return on assets ratio.

Accepted Answer

A) True 
 B)False

Question 6

An important tool in monitoring a credit program is monthly aging of -------------------------------.

Accepted Answer

The answer of An important tool in monitoring a credit...

Question 7

------------------------------- analysis expresses the balance sheet and income statement figures as percentages of some key base figure.

Accepted Answer

The answer of ------------------------------- analysis expresses the balance sheet and...

Question 8

If the debt-to-equity ratio equals 1.0, then the debt-to-asset ratio will equal

Accepted Answer

A)  1.0 
B)  2.0 
C)  0.5 
D)  None of the above 
A)  1.0 
B)  2.0 
C)  0.5 
D)  None of the above

Question 9

One of the reasons financial ratio analysis is used to measure financial performance is so the firm's condition and performance may be compared to other similar firms.

Accepted Answer

A) True 
 B)False

Question 10

The goal many lenders have for the debt-to-asset ratio is for it to be greater than 0.5.

Accepted Answer

A) True 
 B)False

Question 11

The ability of a firm to meet all financial commitments is called its solvency.

Accepted Answer

A) True 
 B)False

Question 12

The set of ratios that is used to evaluate an agribusiness firm may differ from the set of ratios used to evaluate a nonagricultural firm.

Accepted Answer

A) True 
 B)False

Question 13

The goal many lenders have for the current ratio is 1.0.

Accepted Answer

A) True 
 B)False

Question 14

The calculation of the various profitability ratios can be done before or after

Accepted Answer

A)  Interest 
B)  Other income 
C)  Taxes 
D)  All of the above 
A)  Interest 
B)  Other income 
C)  Taxes 
D)  All of the above

Question 15

When calculating the inventory turnover ratio, users may use the ending inventory or the average inventory for the year.

Accepted Answer

A) True 
 B)False

Question 16

When evaluating the days in accounts receivable ratio, the result should at greater than the days in accounts payable ratio.

Accepted Answer

A) True 
 B)False

Question 17

The area of financial ratios used to analyze a firm's ability to take risks and potential losses is

Accepted Answer

A)  Profitability 
B)  Liquidity 
C)  Solvency 
D)  Efficiency 
A)  Profitability 
B)  Liquidity 
C)  Solvency 
D)  Efficiency

Question 18

The profitability ratio(s) included in the profitability linkage analysis model is (are) the

Accepted Answer

A)  Return on investment 
B)  Return on equity 
C)  Return on sales 
D)  All of the above 
A)  Return on investment 
B)  Return on equity 
C)  Return on sales 
D)  All of the above

Question 19

Investors are probably most interested in which ratio?

Accepted Answer

A)  ROE 
B)  ROA 
C)  ROS 
D)  None of the above 
A)  ROE 
B)  ROA 
C)  ROS 
D)  None of the above

Question 20

What are the four areas used when financial ratios are used to analyze a firm?

Accepted Answer

Profitabil

In the profitability analysis model ROS is multiplied by asset turnover to calculate ROE.

Limitations of financial ratio analysis may include which of the following?

Ratios used to evaluate efficiency in the collection of accounts receivable include

Given the following balance sheet information, what is the quick ratio? Cash \ 50,000 Accounts payable \ 50,000 Inventory 50,000 Accrued expenses 25,000 Accounts receivable Short-term loan Total Current Assets \ 150,000 Total Current Liabilities \ 100,000

Interest expense is subtracted from net income before interest when calculating the return on assets ratio.

An important tool in monitoring a credit program is monthly aging of -------------------------------.

------------------------------- analysis expresses the balance sheet and income statement figures as percentages of some key base figure.

If the debt-to-equity ratio equals 1.0, then the debt-to-asset ratio will equal

One of the reasons financial ratio analysis is used to measure financial performance is so the firm's condition and performance may be compared to other similar firms.

The goal many lenders have for the debt-to-asset ratio is for it to be greater than 0.5.

The ability of a firm to meet all financial commitments is called its solvency.

The set of ratios that is used to evaluate an agribusiness firm may differ from the set of ratios used to evaluate a nonagricultural firm.

The goal many lenders have for the current ratio is 1.0.

The calculation of the various profitability ratios can be done before or after

When calculating the inventory turnover ratio, users may use the ending inventory or the average inventory for the year.

When evaluating the days in accounts receivable ratio, the result should at greater than the days in accounts payable ratio.

The area of financial ratios used to analyze a firm's ability to take risks and potential losses is

The profitability ratio(s) included in the profitability linkage analysis model is (are) the

Investors are probably most interested in which ratio?

What are the four areas used when financial ratios are used to analyze a firm?

The Business of Agribusiness

Managing the Agribusiness

Economics for Agribusiness Managers

The Organization of an Agribusiness

International Agribusiness

Strategic Market Planning

The Marketing Mix

Marketing Decision Tools for Agribusiness

Understanding ﬁnancial Statements

Financing the Agribusiness

Tools for Evaluating Operating Decisions

Tools for Evaluating Investment Decisions

Production Planning and Management

Supply Chain Management for Agribusiness

Managing Organizational Structure

Managing Human Resources in Agribusiness

Filters

Exam 10: Analyzing ﬁnancial Statements

In the profitability analysis model ROS is multiplied by asset turnover to calculate ROE.

Limitations of financial ratio analysis may include which of the following?

Ratios used to evaluate efficiency in the collection of accounts receivable include

Given the following balance sheet information, what is the quick ratio? Cash \ 50,000 Accounts payable \ 50,000 Inventory 50,000 Accrued expenses 25,000 Accounts receivable Short-term loan Total Current Assets \ 150,000 Total Current Liabilities \ 100,000

Interest expense is subtracted from net income before interest when calculating the return on assets ratio.

An important tool in monitoring a credit program is monthly aging of -------------------------------.

------------------------------- analysis expresses the balance sheet and income statement figures as percentages of some key base figure.

If the debt-to-equity ratio equals 1.0, then the debt-to-asset ratio will equal

One of the reasons financial ratio analysis is used to measure financial performance is so the firm's condition and performance may be compared to other similar firms.

The goal many lenders have for the debt-to-asset ratio is for it to be greater than 0.5.

The ability of a firm to meet all financial commitments is called its solvency.

The set of ratios that is used to evaluate an agribusiness firm may differ from the set of ratios used to evaluate a nonagricultural firm.

The goal many lenders have for the current ratio is 1.0.

The calculation of the various profitability ratios can be done before or after

When calculating the inventory turnover ratio, users may use the ending inventory or the average inventory for the year.

When evaluating the days in accounts receivable ratio, the result should at greater than the days in accounts payable ratio.

The area of financial ratios used to analyze a firm's ability to take risks and potential losses is

The profitability ratio(s) included in the profitability linkage analysis model is (are) the

Investors are probably most interested in which ratio?

What are the four areas used when financial ratios are used to analyze a firm?

The Business of Agribusiness

Managing the Agribusiness

Economics for Agribusiness Managers

The Organization of an Agribusiness

International Agribusiness

Strategic Market Planning

The Marketing Mix

Marketing Decision Tools for Agribusiness

Understanding ﬁnancial Statements

Financing the Agribusiness

Tools for Evaluating Operating Decisions

Tools for Evaluating Investment Decisions

Production Planning and Management

Supply Chain Management for Agribusiness

Managing Organizational Structure

Managing Human Resources in Agribusiness

Filters