Exam 2: Introduction to Financial Statement Analysis

Which of the following is NOT one of the ways that the Sarbanes-Oxley Act sought to improve the accuracy of information given to both boards and shareholders?

What is the main reason that it is necessary for public companies to follow the rules and format set out in the Generally Accepted Accounting Principles (GAAP)when creating financial statements?

A public company has a book value of $128 million.They have 20 million shares outstanding,with a market price of $4 per share.Which of the following statements is true regarding this company?

How does a firm select the dates for preparation of its income statement?

In general,a successful firm will have a market-to-book ratio that is substantially greater than 1.

Use the table for the question(s)below. -Refer to the balance sheet above.Luther's current ratio for 2006 is closest to:

Use the table for the question(s)below. -The above diagram shows a balance sheet for a certain company.All quantities shown are in millions of dollars.What is the company's net working capital?

Which of the following is NOT one of the financial statements that must be produced by a public company?

What is a firm's net income?

Balance Sheet The balance sheet and income statement of a particular firm are shown above.What does the account receivable days' ratio tell you about this company?

Use the table for the question(s)below. -Refer to the balance sheet above.If in 2006 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share,then what is Luther's enterprise value?

Use the table for the question(s)below. -The above diagram shows a balance sheet for a certain company.All quantities shown are in millions of dollars.If the company has 4 million shares outstanding,and these shares are trading at a price of $8.24 per share,what does this tell you about how investors view this firm's book value?

Which of the following is a way that the Operating Activity section of the statement of cash flows adjusts Net Income from the balance sheet?

The exchanges in which of the following countries or regions do NOT accept the International Financial Reporting Standards set out by the International Accounting Standards Board?

A delivery company is creating a balance sheet.Which of the following would most likely be considered a short-term liability on this balance sheet?

Use the table for the question(s)below. -Refer to the income statement above.For the year ending December 31,2006 Luther's earnings per share are closest to:

How can we cross check the statement of cash flows?

Which of the following balance sheet equations is INCORRECT?

Use the table for the question(s)below. -Refer to the income statement above.Luther's net profit margin for the year ending December 31,2005 is closest to:

Use the table for the question(s)below. -Refer to the balance sheet above.If in 2006 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share,then using the market value of equity,the debt-equity ratio for Luther in 2006 is closest to: