Question 1

Days' inventory on hand is used to analyze

Accepted Answer

A)  long-term solvency. 
B)  cash flow adequacy. 
C)  profitability. 
D)  liquidity. 
A)  long-term solvency. 
B)  cash flow adequacy. 
C)  profitability. 
D)  liquidity.

Question 2

Earnings caused by one-time items are typically sustained in the future.

Accepted Answer

A) True 
 B)False

Question 3

Match each definition with the correct term below.
-Financial performance measurement

Accepted Answer

A) The time that it takes to purchase inventory,sell it,and collect cash for it. 
B) The relationship of the more liquid current assets (cash,marketable securities or short-term investments,and receivables)to current liabilities. 
C) A technique for analyzing financial statements that uses percentages to show the relationship of the different parts to the total in a single statement. 
D) The substance of earnings and their sustainability into future accounting periods. 
E) All the techniques used to show important relationships in financial statements and to relate them to important financial objectives.
F)A technique for analyzing financial statements that involves the computation of dollar amount changes and percentage changes from the previous to the current year.
G)Large companies that have multiple segments and operate in more than one industry.
H)Segments that are no longer a part of a company's operations.
I)A technique for analyzing financial statements in which meaningful relationships between components of the financial statements are shown.
J)The measure of investors' confidence in a company. 
A) The time that it takes to purchase inventory,sell it,and collect cash for it. 
B) The relationship of the more liquid current assets (cash,marketable securities or short-term investments,and receivables)to current liabilities. 
C) A technique for analyzing financial statements that uses percentages to show the relationship of the different parts to the total in a single statement. 
D) The substance of earnings and their sustainability into future accounting periods. 
E) All the techniques used to show important relationships in financial statements and to relate them to important financial objectives.
F)A technique for analyzing financial statements that involves the computation of dollar amount changes and percentage changes from the previous to the current year.
G)Large companies that have multiple segments and operate in more than one industry.
H)Segments that are no longer a part of a company's operations.
I)A technique for analyzing financial statements in which meaningful relationships between components of the financial statements are shown.
J)The measure of investors' confidence in a company.

Question 4

In a common-size income statement for a retail store,the 100 percent amount is for

Accepted Answer

A)  cost of goods sold. 
B)  net revenues. 
C)  gross profit. 
D)  net income. 
A)  cost of goods sold. 
B)  net revenues. 
C)  gross profit. 
D)  net income.

Question 5

Match each definition with the correct term below.
-Operating cycle

Accepted Answer

A) The time that it takes to purchase inventory,sell it,and collect cash for it. 
B) The relationship of the more liquid current assets (cash,marketable securities or short-term investments,and receivables)to current liabilities. 
C) A technique for analyzing financial statements that uses percentages to show the relationship of the different parts to the total in a single statement. 
D) The substance of earnings and their sustainability into future accounting periods. 
E) All the techniques used to show important relationships in financial statements and to relate them to important financial objectives.
F)A technique for analyzing financial statements that involves the computation of dollar amount changes and percentage changes from the previous to the current year.
G)Large companies that have multiple segments and operate in more than one industry.
H)Segments that are no longer a part of a company's operations.
I)A technique for analyzing financial statements in which meaningful relationships between components of the financial statements are shown.
J)The measure of investors' confidence in a company. 
A) The time that it takes to purchase inventory,sell it,and collect cash for it. 
B) The relationship of the more liquid current assets (cash,marketable securities or short-term investments,and receivables)to current liabilities. 
C) A technique for analyzing financial statements that uses percentages to show the relationship of the different parts to the total in a single statement. 
D) The substance of earnings and their sustainability into future accounting periods. 
E) All the techniques used to show important relationships in financial statements and to relate them to important financial objectives.
F)A technique for analyzing financial statements that involves the computation of dollar amount changes and percentage changes from the previous to the current year.
G)Large companies that have multiple segments and operate in more than one industry.
H)Segments that are no longer a part of a company's operations.
I)A technique for analyzing financial statements in which meaningful relationships between components of the financial statements are shown.
J)The measure of investors' confidence in a company.

Question 6

The length of the operating cycle equals the days' sales uncollected plus the

Accepted Answer

A)  receivable turnover. 
B)  days' payable. 
C)  days' inventory on hand. 
D)  payables turnover. 
A)  receivable turnover. 
B)  days' payable. 
C)  days' inventory on hand. 
D)  payables turnover.

Question 7

The most complete financial newspaper in the United States is the Financial Times.

Accepted Answer

A) True 
 B)False

Question 8

Accounting estimates rarely affect the reported income of a company.

Accepted Answer

A) True 
 B)False

Question 9

Declining profitability and liquidity ratios are indications that a company may not survive.

Accepted Answer

A) True 
 B)False

Question 10

In a common-size income statement,each item is expressed as a percentage of net revenues.

Accepted Answer

A) True 
 B)False

Question 11

Holiday Corporation provided these figures for the year ended December 31,2013: Cost of goods sold,$516,117; change in inventory,$67,483 decrease; average accounts payable,$64,599.
What is the company's payables turnover? Round your answer to one decimal place.

Accepted Answer

A)  9.3 times 
B)  6.4 times 
C)  6.9 times 
D)  7.5 times 
A)  9.3 times 
B)  6.4 times 
C)  6.9 times 
D)  7.5 times

Question 12

The calculation of free cash flow contains a deduction for

Accepted Answer

A)  interest expense. 
B)  dividends. 
C)  net cash flows from operating activities. 
D)  depreciation. 
A)  interest expense. 
B)  dividends. 
C)  net cash flows from operating activities. 
D)  depreciation.

Question 13

For 2013,Castro Corporation had average total assets of $580,000,net sales of $480,000,net income of $30,000,net cash flows from operating activities of $40,000,dividend payments of $24,000,purchases of plant assets of $132,000,and sales of plant assets of $56,000.Using this information,compute (a)cash flow yield,(b)cash flows to sales,(c)cash flows to assets,and (d)free cash flow.Round amounts to one decimal place.

Accepted Answer

a.1.3 times [$40,000 ÷ $30,000

Question 14

The nonoperating items that appear on the income statement include

Accepted Answer

A)  discontinued operations. 
B)  gains or losses on the sale or disposal of these segments. 
C)  both discontinued operations and gains or losses on the sale or disposal of these segments. 
D)  neither discontinued operations nor gains or losses on the sale or disposal of these segments. 
A)  discontinued operations. 
B)  gains or losses on the sale or disposal of these segments. 
C)  both discontinued operations and gains or losses on the sale or disposal of these segments. 
D)  neither discontinued operations nor gains or losses on the sale or disposal of these segments.

Question 15

If dividends declared per share during 2011 (the base year),2012,and 2013 are $2.40,$1.80,and $1.92,respectively,the index numbers assigned to 2012 and 2013,respectively,are

Accepted Answer

A)  75% and 80%. 
B)  180% and 70%. 
C)  133.3% and 100%. 
D)  60% and 85%. 
A)  75% and 80%. 
B)  180% and 70%. 
C)  133.3% and 100%. 
D)  60% and 85%.

Question 16

In conducting horizontal analysis,it is important to focus attention on the changes in

Accepted Answer

A)  the rate of inflation. 
B)  the composition of the statements. 
C)  dollar amounts and their percentages. 
D)  the accounting methods employed. 
A)  the rate of inflation. 
B)  the composition of the statements. 
C)  dollar amounts and their percentages. 
D)  the accounting methods employed.

Question 17

Financial statements for Cancun Corporation are presented below.
     Note: Dividends of $0.60 per share were declared and paid during 2013.The market price of the stock on December 31,2013 was $18.00 per share.
Compute the following for 2013 and place your answers in the spaces provided.Round answers to two decimal places.Show your work.

Accepted Answer

@#IMG-DLM& 
*Additional Calculations: 
Quick asset

Question 18

The following information pertains to Jasmin Corporation.Assume that all balance sheet amounts represent both average and ending figures.     Jasmin Corporation had 6,000 shares of common stock issued and outstanding.The market price of Jasmin common stock on December 31,2013,was $20.Jasmin paid dividends of $0.90 per share during 2013.
What is the price/earnings (P/E)ratio for this corporation?

Accepted Answer

A)  6.2 times 
B)  7.2 times 
C)  8.2 times 
D)  9.7 times 
A)  6.2 times 
B)  7.2 times 
C)  8.2 times 
D)  9.7 times

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

In horizontal analysis,the base year is the most current year being examined.

Accepted Answer

A) True 
 B)False

Days' inventory on hand is used to analyze

Earnings caused by one-time items are typically sustained in the future.

Match each definition with the correct term below. -Financial performance measurement

In a common-size income statement for a retail store,the 100 percent amount is for

Match each definition with the correct term below. -Operating cycle

The length of the operating cycle equals the days' sales uncollected plus the

The most complete financial newspaper in the United States is the Financial Times.

Accounting estimates rarely affect the reported income of a company.

Declining profitability and liquidity ratios are indications that a company may not survive.

In a common-size income statement,each item is expressed as a percentage of net revenues.

Holiday Corporation provided these figures for the year ended December 31,2013: Cost of goods sold,$516,117; change in inventory,$67,483 decrease; average accounts payable,$64,599. What is the company's payables turnover? Round your answer to one decimal place.

The calculation of free cash flow contains a deduction for

The nonoperating items that appear on the income statement include

If dividends declared per share during 2011 (the base year),2012,and 2013 are $2.40,$1.80,and $1.92,respectively,the index numbers assigned to 2012 and 2013,respectively,are

In conducting horizontal analysis,it is important to focus attention on the changes in

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

In horizontal analysis,the base year is the most current year being examined.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Investments

Filters

Exam 14: Financial Performance Measurement

Days' inventory on hand is used to analyze

Earnings caused by one-time items are typically sustained in the future.

Match each definition with the correct term below. -Financial performance measurement

In a common-size income statement for a retail store,the 100 percent amount is for

Match each definition with the correct term below. -Operating cycle

The length of the operating cycle equals the days' sales uncollected plus the

The most complete financial newspaper in the United States is the Financial Times.

Accounting estimates rarely affect the reported income of a company.

Declining profitability and liquidity ratios are indications that a company may not survive.

In a common-size income statement,each item is expressed as a percentage of net revenues.

Holiday Corporation provided these figures for the year ended December 31,2013: Cost of goods sold,$516,117; change in inventory,$67,483 decrease; average accounts payable,$64,599. What is the company's payables turnover? Round your answer to one decimal place.

The calculation of free cash flow contains a deduction for

The nonoperating items that appear on the income statement include

If dividends declared per share during 2011 (the base year),2012,and 2013 are $2.40,$1.80,and $1.92,respectively,the index numbers assigned to 2012 and 2013,respectively,are

In conducting horizontal analysis,it is important to focus attention on the changes in

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

In horizontal analysis,the base year is the most current year being examined.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Investments

Filters