Question 1

Which of the following would be users of financial statement analysis?

Accepted Answer

A)  Management 
B)  Bankers 
C)  Investment analysts 
D)  All of the above 
A)  Management 
B)  Bankers 
C)  Investment analysts 
D)  All of the above D

Question 2

Show the effect of each of the transactions below on total assets and working capital by using one of the following symbols in each box to complete the table.

Accepted Answer

1. Transaction increases cash and decrea

Question 3

-The earnings per share for 2017 is:

Accepted Answer

A)  $60.07 
B)  $ 1.57 
C)  $ 7.16 
D)  $10.97 
A)  $60.07 
B)  $ 1.57 
C)  $ 7.16 
D)  $10.97 D

Question 4

-Kamal Company's debt-to-equity ratio for 2017 is:

Accepted Answer

A)  An indicator that Kamal Company's ability to meet current interest payments to creditors is increasing. 
B)  Increasing slightly from 2016 to 2017 
C)  An indicator that for every $1 of capital that stockholders provided, creditors provided nearly $0.52 in 2017 
D)  An indicator that Kamal Company has relied on stockholders for funds more in 2017 than in 2018 
A)  An indicator that Kamal Company's ability to meet current interest payments to creditors is increasing. 
B)  Increasing slightly from 2016 to 2017 
C)  An indicator that for every $1 of capital that stockholders provided, creditors provided nearly $0.52 in 2017 
D)  An indicator that Kamal Company has relied on stockholders for funds more in 2017 than in 2018

Question 5

Financial statement analysis enables managers to see their firm as outsiders see it, to ascertain compliance with credit restrictions, to compare their firm with similar firms, and to identify potential strengths and weaknesses.

Accepted Answer

A) True 
 B)False

Question 6

-The return-on-sales ratio for 2017 is:

Accepted Answer

A)  5.0 percent 
B)  19.3 percent 
C)  5.3 percent 
D)  9.5 percent 
A)  5.0 percent 
B)  19.3 percent 
C)  5.3 percent 
D)  9.5 percent

Question 7

The basic activities conducted by a typical for-profit organization are:

Accepted Answer

A)  Generating capital from equity and debt 
B)  Using assets to generate sales and profits 
C)  Using profits to pay the cost of capital 
D)  All of these responses are basic activities of a typical for-profit organization. 
A)  Generating capital from equity and debt 
B)  Using assets to generate sales and profits 
C)  Using profits to pay the cost of capital 
D)  All of these responses are basic activities of a typical for-profit organization.

Question 8

In the spaces provided below, complete a vertical analysis of the current asset section of Barry Company's balance sheets for 2016 and 2017. Your answers should be rounded to one decimal place, e.g., 10.3%.

Accepted Answer

@#IMG-DLM& *Does not

Question 9

Primary measures of performance are asset turnover, return on assets, return on equity, and earnings per share.

Accepted Answer

A) True 
 B)False

Question 10

Managers monitor earnings per share (EPS) because:

Accepted Answer

A)  Investors use EPS as a basis in evaluating the firm's profitability. 
B)  EPS should be used as a single broad measure of overall firm performance. . 
C)  EPS is affected by dividends paid. 
D)  Retained earnings must be available for the payment of EPS. 
A)  Investors use EPS as a basis in evaluating the firm's profitability. 
B)  EPS should be used as a single broad measure of overall firm performance. . 
C)  EPS is affected by dividends paid. 
D)  Retained earnings must be available for the payment of EPS.

Question 11

-The debt-to-equity ratio for 2017 is:

Accepted Answer

A)  54.9 percent 
B)  48.2 percent 
C)  45.1 percent 
D)  61.9 percent 
A)  54.9 percent 
B)  48.2 percent 
C)  45.1 percent 
D)  61.9 percent

Question 12

-Using common-size analysis, what percentage would be attributable to the 2017 income tax expense of Oakbrook Company?

Accepted Answer

A)  5.1 percent 
B)  11.8 percent 
C)  5.4 percent 
D)  20.3 percent 
A)  5.1 percent 
B)  11.8 percent 
C)  5.4 percent 
D)  20.3 percent

Question 13

-Using common-size analysis, what percentage would be attributable to the 2017 wage expense of Oakbrook Company?

Accepted Answer

A)  10.2 percent 
B)  9.2 percent 
C)  5.2 percent 
D)  33.2 percent 
A)  10.2 percent 
B)  9.2 percent 
C)  5.2 percent 
D)  33.2 percent

Question 14

Financial statement analysis involves comparing financial statements for the current period with those of previous periods and/or other companies, assessing the internal composition of the financial statements, and measuring relations within and among the financial statements.

Accepted Answer

A) True 
 B)False

Question 15

-Which of the following would result from a vertical analysis of Robbins Corporation's balance sheet?

Accepted Answer

A)  Accounts receivable increased $10,000 or 40.0% during 2017. 
B)  Inventories decreased $1,000 or 4.17% during 2017. 
C)  Cost of goods sold increased $40,000 or 19.05% during 2017. 
D)  Inventories are 5.11% of total assets for 2017 
A)  Accounts receivable increased $10,000 or 40.0% during 2017. 
B)  Inventories decreased $1,000 or 4.17% during 2017. 
C)  Cost of goods sold increased $40,000 or 19.05% during 2017. 
D)  Inventories are 5.11% of total assets for 2017

Question 16

If the fixed cost of capital is greater than the return on assets, financial leverage is favorable.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following generally indicates a positive change?

Accepted Answer

A)  The number of days' sales in receivables decreases. 
B)  Earnings per share decreases. 
C)  The current ratio decreases. 
D)  The times-interest-earned ratio decreases. 
A)  The number of days' sales in receivables decreases. 
B)  Earnings per share decreases. 
C)  The current ratio decreases. 
D)  The times-interest-earned ratio decreases.

Question 18

Financial statement analysis is least useful for:

Accepted Answer

A)  Providing creditors with information on the status of their loans 
B)  Providing investors with useful information for valuing securities 
C)  Providing managers with relevant information to help achieve organizational goals 
D)  Providing the Internal Revenue Service with information to determine the amount of taxes owed 
A)  Providing creditors with information on the status of their loans 
B)  Providing investors with useful information for valuing securities 
C)  Providing managers with relevant information to help achieve organizational goals 
D)  Providing the Internal Revenue Service with information to determine the amount of taxes owed

Question 19

Which of the following will increase working capital?

Accepted Answer

A)  Purchasing inventory on credit 
B)  Payment of accounts payable 
C)  Cash sales 
D)  Purchasing office furniture with cash 
A)  Purchasing inventory on credit 
B)  Payment of accounts payable 
C)  Cash sales 
D)  Purchasing office furniture with cash

Question 20

Presented below are selected data from the financial statements of Hamilton Corp. for 2017 and 2016.
  Earnings per share (EPS) is reported on the 2017 income statement as:

Accepted Answer

A)  $1.80 
B)  $2.10 
C)  $2.88 
D)  $2.90 
A)  $1.80 
B)  $2.10 
C)  $2.88 
D)  $2.90

Which of the following would be users of financial statement analysis?

Show the effect of each of the transactions below on total assets and working capital by using one of the following symbols in each box to complete the table.

-The earnings per share for 2017 is:

-Kamal Company's debt-to-equity ratio for 2017 is:

Financial statement analysis enables managers to see their firm as outsiders see it, to ascertain compliance with credit restrictions, to compare their firm with similar firms, and to identify potential strengths and weaknesses.

-The return-on-sales ratio for 2017 is:

The basic activities conducted by a typical for-profit organization are:

In the spaces provided below, complete a vertical analysis of the current asset section of Barry Company's balance sheets for 2016 and 2017. Your answers should be rounded to one decimal place, e.g., 10.3%.

Primary measures of performance are asset turnover, return on assets, return on equity, and earnings per share.

Managers monitor earnings per share (EPS) because:

-The debt-to-equity ratio for 2017 is:

-Using common-size analysis, what percentage would be attributable to the 2017 income tax expense of Oakbrook Company?

-Using common-size analysis, what percentage would be attributable to the 2017 wage expense of Oakbrook Company?

Financial statement analysis involves comparing financial statements for the current period with those of previous periods and/or other companies, assessing the internal composition of the financial statements, and measuring relations within and among the financial statements.

-Which of the following would result from a vertical analysis of Robbins Corporation's balance sheet?

If the fixed cost of capital is greater than the return on assets, financial leverage is favorable.

Which of the following generally indicates a positive change?

Financial statement analysis is least useful for:

Which of the following will increase working capital?

Presented below are selected data from the financial statements of Hamilton Corp. for 2017 and 2016. Earnings per share (EPS) is reported on the 2017 income statement as:

Managerial Accounting: Tools for Decision Making

Cost Behavior, Activity Analysis, and Cost Estimation

Cost-Volume-Profit Analysis and Planning

Relevant Costs and Benefits for Decision Making

Product Costing: Job and Process Operations

Activity-Based Costing, Customer Profitability, and Activity-Based Management

Additional Topics in Product Costing

Pricing and Other Product Management Decisions

Operational Budgeting and Profit Planning

Standard Costs and Performance Reports

Segment Reporting, Transfer Pricing, and Balanced Scorecard

Capital Budgeting Decisions

Filters

Exam 13: Appendix: Managerial Analysis of Financial Statements

Which of the following would be users of financial statement analysis?

Show the effect of each of the transactions below on total assets and working capital by using one of the following symbols in each box to complete the table.

-The earnings per share for 2017 is:

-Kamal Company's debt-to-equity ratio for 2017 is:

Financial statement analysis enables managers to see their firm as outsiders see it, to ascertain compliance with credit restrictions, to compare their firm with similar firms, and to identify potential strengths and weaknesses.

-The return-on-sales ratio for 2017 is:

The basic activities conducted by a typical for-profit organization are:

In the spaces provided below, complete a vertical analysis of the current asset section of Barry Company's balance sheets for 2016 and 2017. Your answers should be rounded to one decimal place, e.g., 10.3%.

Primary measures of performance are asset turnover, return on assets, return on equity, and earnings per share.

Managers monitor earnings per share (EPS) because:

-The debt-to-equity ratio for 2017 is:

-Using common-size analysis, what percentage would be attributable to the 2017 income tax expense of Oakbrook Company?

-Using common-size analysis, what percentage would be attributable to the 2017 wage expense of Oakbrook Company?

Financial statement analysis involves comparing financial statements for the current period with those of previous periods and/or other companies, assessing the internal composition of the financial statements, and measuring relations within and among the financial statements.

-Which of the following would result from a vertical analysis of Robbins Corporation's balance sheet?

If the fixed cost of capital is greater than the return on assets, financial leverage is favorable.

Which of the following generally indicates a positive change?

Financial statement analysis is least useful for:

Which of the following will increase working capital?

Presented below are selected data from the financial statements of Hamilton Corp. for 2017 and 2016. Earnings per share (EPS) is reported on the 2017 income statement as:

Managerial Accounting: Tools for Decision Making

Cost Behavior, Activity Analysis, and Cost Estimation

Cost-Volume-Profit Analysis and Planning

Relevant Costs and Benefits for Decision Making

Product Costing: Job and Process Operations

Activity-Based Costing, Customer Profitability, and Activity-Based Management

Additional Topics in Product Costing

Pricing and Other Product Management Decisions

Operational Budgeting and Profit Planning

Standard Costs and Performance Reports

Segment Reporting, Transfer Pricing, and Balanced Scorecard

Capital Budgeting Decisions

Filters