Question 1

Below are selected data from the financial statements of Pepper Company for 2016 and 2017.
  The debt-to-equity ratio for 2017 is:

Accepted Answer

A)  $1.337 to $1 which should be a cause of concern for Pepper Company managers. 
B)  $1.337 to $1 which should be a cause of concern for stockholders 
C)  Increasing, which should be a negative sign for credit analysts 
D)  All of the above. 
A)  $1.337 to $1 which should be a cause of concern for Pepper Company managers. 
B)  $1.337 to $1 which should be a cause of concern for stockholders 
C)  Increasing, which should be a negative sign for credit analysts 
D)  All of the above.

Question 2

Which of the following is not a basic performance activity conducted by a typical for-profit organization?

Accepted Answer

A)  Generating capital from equity and debt 
B)  Using assets to generate sales and profits 
C)  Using profits to pay expenses such as wages, salaries, and bonuses 
D)  Using profits to pay the cost of capital 
A)  Generating capital from equity and debt 
B)  Using assets to generate sales and profits 
C)  Using profits to pay expenses such as wages, salaries, and bonuses 
D)  Using profits to pay the cost of capital

Question 3

-Using common-size analysis, what percentage would be attributable to the 2016 accumulated depreciation of Joshua Company?

Accepted Answer

A)  (17.1) percent 
B)  20.3 percent 
C)  22.5 percent 
D)  (20.3) percent 
A)  (17.1) percent 
B)  20.3 percent 
C)  22.5 percent 
D)  (20.3) percent

Question 4

Competitor Analysis is comparison of a firm's financial measures to:

Accepted Answer

A)  Those of previous periods 
B)  Similar measures for other firms in the industry or to industry averages 
C)  Industry forecasts and economic outlooks 
D)  Its budgeted measures 
A)  Those of previous periods 
B)  Similar measures for other firms in the industry or to industry averages 
C)  Industry forecasts and economic outlooks 
D)  Its budgeted measures

Question 5

Indicate the type of each ratio listed below as short term solvency, long term solvency, or performance. 
●Short term solvency ratio
●Long term solvency ratio
●Performance ratio

Accepted Answer

The answer of Indicate the type of each ratio listed...

Question 6

Mamantor Company had a debt to equity ratio of 0.600. The company received a loan. The effect of the transaction is:

Accepted Answer

A)  The ratio decreased. 
B)  The ratio remained the same. 
C)  The ratio increased. 
D)  There is insufficient information to predict the effect. 
A)  The ratio decreased. 
B)  The ratio remained the same. 
C)  The ratio increased. 
D)  There is insufficient information to predict the effect.

Question 7

Solvency refers to a firm's ability to pay its debts as they come due.

Accepted Answer

A) True 
 B)False

Question 8

-Kamal Company's debt-to-equity ratio was 0.52 to 1 in 2017 and 0.58 to 1 in 2016. Which of the following statements is true concerning Kamal ?

Accepted Answer

A)  The company has a smaller percentage of capital from owners at the end of 2017 than at the end of 2016. 
B)  The company is improving its debt-to-equity ratio. 
C)  The company relied more on creditors for capital during 2017 than in 2016. 
D)  The company appears to be in a weaker position at the end of 2017 to finance capital expenditures from cash flow generated by operating activities. 
A)  The company has a smaller percentage of capital from owners at the end of 2017 than at the end of 2016. 
B)  The company is improving its debt-to-equity ratio. 
C)  The company relied more on creditors for capital during 2017 than in 2016. 
D)  The company appears to be in a weaker position at the end of 2017 to finance capital expenditures from cash flow generated by operating activities.

Question 9

A solvency measure used also to assist in performance evaluation is:

Accepted Answer

A)  Days sales in receivables 
B)  Return on equity 
C)  Financial leverage 
D)  Return on assets 
A)  Days sales in receivables 
B)  Return on equity 
C)  Financial leverage 
D)  Return on assets

Question 10

-The dividend payout ratio for 2017 is:

Accepted Answer

A)  9.10 percent 
B)  30.60 percent 
C)  63.81 percent 
D)  100.00 percent 
A)  9.10 percent 
B)  30.60 percent 
C)  63.81 percent 
D)  100.00 percent

Question 11

Explain the difference between solvency evaluation and performance evaluation. Provide an example of at least two ratios in each category.

Accepted Answer

Solvency evaluation refers to analyses t

Question 12

Glamor Industries' cost of goods sold percentage increased from 33.9% in 2016 to 47.7% in 2017. What is the trend in this change?

Accepted Answer

A)  An upward, favorable trend 
B)  An upward, unfavorable trend 
C)  It depends on whether gross margin increased or decreased during the period 
D)  Trends cannot be determined without the dollar amount of the increases provided 
A)  An upward, favorable trend 
B)  An upward, unfavorable trend 
C)  It depends on whether gross margin increased or decreased during the period 
D)  Trends cannot be determined without the dollar amount of the increases provided

Question 13

Primary measures of short term solvency are the debt-to-equity ratio and the times-interest-earned measure.

Accepted Answer

A) True 
 B)False

Question 14

-Using common-size analysis, what percentage would be attributable to the 2017 accounts receivable of Joshua Company?

Accepted Answer

A)  14.5 percent 
B)  13.5 percent 
C)  35.4 percent 
D)  37.1 percent 
A)  14.5 percent 
B)  13.5 percent 
C)  35.4 percent 
D)  37.1 percent

Question 15

In vertical analysis of the income statement, the base amount is most commonly:

Accepted Answer

A)  Gross profit 
B)  Net income 
C)  Sales 
D)  Cost of goods sold 
A)  Gross profit 
B)  Net income 
C)  Sales 
D)  Cost of goods sold

Question 16

Vertical analysis helps to identify significant changes that have taken place during the period and to determine whether the changes have favorable or unfavorable impacts on solvency and performance.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is false regarding the current ratio compared to the acid test ratio?

Accepted Answer

A)  The current ratio is less strict and more general. 
B)  The acid test ratio measures the firm's ability to pay its debts over a shorter period of time. 
C)  Both ratios use asset accounts, but the acid test ratio does not use inventories. 
D)  Both ratios exclude prepaid expenses in the numerator. 
A)  The current ratio is less strict and more general. 
B)  The acid test ratio measures the firm's ability to pay its debts over a shorter period of time. 
C)  Both ratios use asset accounts, but the acid test ratio does not use inventories. 
D)  Both ratios exclude prepaid expenses in the numerator.

Question 18

The current ratio and acid-test ratio differ in:

Accepted Answer

A)  the composition of assets in the ratio denominators. 
B)  the composition of liabilities in the ratio denominators. 
C)  that the acid test is more specifc than the current ratio as a test for solvency. 
D)  the usefulness as a performance measure. 
A)  the composition of assets in the ratio denominators. 
B)  the composition of liabilities in the ratio denominators. 
C)  that the acid test is more specifc than the current ratio as a test for solvency. 
D)  the usefulness as a performance measure.

Question 19

In vertical common size analysis, the dollar figure for an account is expressed in terms of that same account figure for a previous year.

Accepted Answer

A) True 
 B)False

Question 20

-The price-earnings ratio for 2017 is:

Accepted Answer

A)  11.93 times 
B)  12.13 times 
C)  2.28 times 
D)  4.68 times 
A)  11.93 times 
B)  12.13 times 
C)  2.28 times 
D)  4.68 times

Below are selected data from the financial statements of Pepper Company for 2016 and 2017. The debt-to-equity ratio for 2017 is:

Which of the following is not a basic performance activity conducted by a typical for-profit organization?

-Using common-size analysis, what percentage would be attributable to the 2016 accumulated depreciation of Joshua Company?

Competitor Analysis is comparison of a firm's financial measures to:

Indicate the type of each ratio listed below as short term solvency, long term solvency, or performance. ●Short term solvency ratio ●Long term solvency ratio ●Performance ratio

Mamantor Company had a debt to equity ratio of 0.600. The company received a loan. The effect of the transaction is:

Solvency refers to a firm's ability to pay its debts as they come due.

-Kamal Company's debt-to-equity ratio was 0.52 to 1 in 2017 and 0.58 to 1 in 2016. Which of the following statements is true concerning Kamal ?

A solvency measure used also to assist in performance evaluation is:

-The dividend payout ratio for 2017 is:

Explain the difference between solvency evaluation and performance evaluation. Provide an example of at least two ratios in each category.

Glamor Industries' cost of goods sold percentage increased from 33.9% in 2016 to 47.7% in 2017. What is the trend in this change?

Primary measures of short term solvency are the debt-to-equity ratio and the times-interest-earned measure.

-Using common-size analysis, what percentage would be attributable to the 2017 accounts receivable of Joshua Company?

In vertical analysis of the income statement, the base amount is most commonly:

Vertical analysis helps to identify significant changes that have taken place during the period and to determine whether the changes have favorable or unfavorable impacts on solvency and performance.

Which of the following is false regarding the current ratio compared to the acid test ratio?

The current ratio and acid-test ratio differ in:

In vertical common size analysis, the dollar figure for an account is expressed in terms of that same account figure for a previous year.

-The price-earnings ratio for 2017 is:

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

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Exam 13: Appendix: Managerial Analysis of Financial Statements

Below are selected data from the financial statements of Pepper Company for 2016 and 2017. The debt-to-equity ratio for 2017 is:

Which of the following is not a basic performance activity conducted by a typical for-profit organization?

-Using common-size analysis, what percentage would be attributable to the 2016 accumulated depreciation of Joshua Company?

Competitor Analysis is comparison of a firm's financial measures to:

Indicate the type of each ratio listed below as short term solvency, long term solvency, or performance. ●Short term solvency ratio ●Long term solvency ratio ●Performance ratio

Mamantor Company had a debt to equity ratio of 0.600. The company received a loan. The effect of the transaction is:

Solvency refers to a firm's ability to pay its debts as they come due.

-Kamal Company's debt-to-equity ratio was 0.52 to 1 in 2017 and 0.58 to 1 in 2016. Which of the following statements is true concerning Kamal ?

A solvency measure used also to assist in performance evaluation is:

-The dividend payout ratio for 2017 is:

Explain the difference between solvency evaluation and performance evaluation. Provide an example of at least two ratios in each category.

Glamor Industries' cost of goods sold percentage increased from 33.9% in 2016 to 47.7% in 2017. What is the trend in this change?

Primary measures of short term solvency are the debt-to-equity ratio and the times-interest-earned measure.

-Using common-size analysis, what percentage would be attributable to the 2017 accounts receivable of Joshua Company?

In vertical analysis of the income statement, the base amount is most commonly:

Vertical analysis helps to identify significant changes that have taken place during the period and to determine whether the changes have favorable or unfavorable impacts on solvency and performance.

Which of the following is false regarding the current ratio compared to the acid test ratio?

The current ratio and acid-test ratio differ in:

In vertical common size analysis, the dollar figure for an account is expressed in terms of that same account figure for a previous year.

-The price-earnings ratio for 2017 is:

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