Exam 14: Financial Performance Measurement

Per the Sarbanes-Oxley Act of 2002,a compensation committee,comprised of a public corporation's top executives,must be established to determine the salaries and wages of its employees.

During the year,Dempsey Corporation's current ratio increased while its quick ratio decreased.Which of the following could help explain this situation?

Why is the quick ratio probably better than the current ratio as a measure of short-term liquidity?

Disclosure of segment information is useless in the analysis of diversified companies.

In a common-size income statement,net income is represented by 100 percent.

Which of the following situations severely limits the use of industry norms as standards of comparison?

A company that is leveraged is one that

For details about the financial histories of companies,one could consult publications of Moody's and Standard & Poor's.

Match each definition with the correct term below. -Horizontal analysis

An example of horizontal analysis is

The existence of diversified companies makes which of the following very difficult?

Asset turnover is most closely associated with a company's liquidity position.

A reduction in the value of an asset below its carrying value on the balance sheet is called a restructuring.

To calculate cash flows to assets and cash flows to sales,one needs the figure for net cash flows from financing activities.

In a trend analysis,an index number of 139 for 2013 sales indicates that

Which of the following describes the asset turnover ratio?

Dun & Bradstreet publishes

One-time decreases in earnings always indicate that earnings will be poor in the future.

Match each definition with the correct term below. -Ratio analysis

Following are the financial statements for Starman Corporation for the year ended December 31,2013.Assume that all balance sheet amounts represent both average and ending figures. What is the profit margin for this corporation?