Question 1

Which of the following is not a profitability ratio?

Accepted Answer

A)  Return on equity 
B)  Return on assets 
C)  Asset turnover 
D)  Quick ratio 
A)  Return on equity 
B)  Return on assets 
C)  Asset turnover 
D)  Quick ratio

Question 2

Use the following information to calculate the ratios requested below.Round answers to one decimal place.Show your work.

Accepted Answer

The answer of Use the following information to calculate the...

Question 3

Using the following information reported in an annual report,prepare a horizontal analysis of the consolidated balance sheets.(Round percentage answers to one decimal place.)

Accepted Answer

The answer of Using the following information reported in an...

Question 4

Cash flows to sales and cash flows to assets are measured in terms of

Accepted Answer

A)  times. 
B)  a percentage. 
C)  dollars. 
D)  days. 
A)  times. 
B)  a percentage. 
C)  dollars. 
D)  days.

Question 5

A common measure of capital structure and leverage is the

Accepted Answer

A)  asset turnover. 
B)  debt to equity ratio. 
C)  current ratio. 
D)  receivable turnover. 
A)  asset turnover. 
B)  debt to equity ratio. 
C)  current ratio. 
D)  receivable turnover.

Question 6

An example of an accounting method that could affect operating income is

Accepted Answer

A)  inventory valuation method. 
B)  revenue recognition method. 
C)  depreciation method. 
D)  all of these could affect operating income. 
A)  inventory valuation method. 
B)  revenue recognition method. 
C)  depreciation method. 
D)  all of these could affect operating income.

Question 7

Match each definition with the correct term below.
-Diversified companies

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 8

Most companies issue interim financial statements to the public on a monthly basis.

Accepted Answer

A) True 
 B)False

Question 9

In a diversified company,segments may be represented by different industries,geographical markets,and major customers.

Accepted Answer

A) True 
 B)False

Question 10

The sale of plant assets and the payment of dividends will reduce free cash flow.

Accepted Answer

A) True 
 B)False

Question 11

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 current ratio for this corporation?

Accepted Answer

A)  1.70 times 
B)  1.54 times 
C)  1.00 times 
D)  2.00 times 
A)  1.70 times 
B)  1.54 times 
C)  1.00 times 
D)  2.00 times

Question 12

Vertical analysis will result in common-size statements.

Accepted Answer

A) True 
 B)False

Question 13

The comparison of financial measures or ratios of the same company over a period of times is superior to the use of rule-of-thumb measures.

Accepted Answer

A) True 
 B)False

Question 14

Match each definition with the correct term below.
-Price/earnings (P/E)ratio

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 15

In general,the greater the investment risk taken,the lower the return required as compensation.

Accepted Answer

A) True 
 B)False

Question 16

Investors,creditors,and customers are considered external users of financial statements.

Accepted Answer

A) True 
 B)False

Question 17

In a common-size financial statement,a designation of 25 percent could not be given to

Accepted Answer

A)  net revenues. 
B)  total current assets. 
C)  total long-term debt. 
D)  net earnings. 
A)  net revenues. 
B)  total current assets. 
C)  total long-term debt. 
D)  net earnings.

Question 18

Does the existence of conglomerates make financial performance evaluation easier or more difficult? Why?

Accepted Answer

Conglomerates,or diversified companies,o

Question 19

Liquidity ratios are an indication of a company's

Accepted Answer

A)  ability to pay bills when they are due and to meet unexpected needs for cash. 
B)  overall debt position. 
C)  overall debt to equity position. 
D)  ability to effectively employ its resources. 
A)  ability to pay bills when they are due and to meet unexpected needs for cash. 
B)  overall debt position. 
C)  overall debt to equity position. 
D)  ability to effectively employ its resources.

Question 20

Which of the following does not affect quality of earnings?

Accepted Answer

A)  Accounting estimates 
B)  One-time items 
C)  Accounting methods 
D)  Industry norms 
A)  Accounting estimates 
B)  One-time items 
C)  Accounting methods 
D)  Industry norms

Which of the following is not a profitability ratio?

Use the following information to calculate the ratios requested below.Round answers to one decimal place.Show your work.

Using the following information reported in an annual report,prepare a horizontal analysis of the consolidated balance sheets.(Round percentage answers to one decimal place.)

Cash flows to sales and cash flows to assets are measured in terms of

A common measure of capital structure and leverage is the

An example of an accounting method that could affect operating income is

Match each definition with the correct term below. -Diversified companies

Most companies issue interim financial statements to the public on a monthly basis.

In a diversified company,segments may be represented by different industries,geographical markets,and major customers.

The sale of plant assets and the payment of dividends will reduce free cash flow.

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 current ratio for this corporation?

Vertical analysis will result in common-size statements.

The comparison of financial measures or ratios of the same company over a period of times is superior to the use of rule-of-thumb measures.

Match each definition with the correct term below. -Price/earnings (P/E)ratio

In general,the greater the investment risk taken,the lower the return required as compensation.

Investors,creditors,and customers are considered external users of financial statements.

In a common-size financial statement,a designation of 25 percent could not be given to

Does the existence of conglomerates make financial performance evaluation easier or more difficult? Why?

Liquidity ratios are an indication of a company's

Which of the following does not affect quality of earnings?

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

Which of the following is not a profitability ratio?

Use the following information to calculate the ratios requested below.Round answers to one decimal place.Show your work.

Using the following information reported in an annual report,prepare a horizontal analysis of the consolidated balance sheets.(Round percentage answers to one decimal place.)

Cash flows to sales and cash flows to assets are measured in terms of

A common measure of capital structure and leverage is the

An example of an accounting method that could affect operating income is

Match each definition with the correct term below. -Diversified companies

Most companies issue interim financial statements to the public on a monthly basis.

In a diversified company,segments may be represented by different industries,geographical markets,and major customers.

The sale of plant assets and the payment of dividends will reduce free cash flow.

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 current ratio for this corporation?

Vertical analysis will result in common-size statements.

The comparison of financial measures or ratios of the same company over a period of times is superior to the use of rule-of-thumb measures.

Match each definition with the correct term below. -Price/earnings (P/E)ratio

In general,the greater the investment risk taken,the lower the return required as compensation.

Investors,creditors,and customers are considered external users of financial statements.

In a common-size financial statement,a designation of 25 percent could not be given to

Does the existence of conglomerates make financial performance evaluation easier or more difficult? Why?

Liquidity ratios are an indication of a company's

Which of the following does not affect quality of earnings?

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