Question 1

The statement of cash flows ________.

Accepted Answer

A) shows the financial position of a firm at a given point of time 
B) summarizes all the purchase and sale of fixed assets and raw materials 
C) provides insight into a firm's operating,investment,and financing cash flows 
D) classifies a firm's cash flows as operating,investing,financing,and other activities 
A) shows the financial position of a firm at a given point of time 
B) summarizes all the purchase and sale of fixed assets and raw materials 
C) provides insight into a firm's operating,investment,and financing cash flows 
D) classifies a firm's cash flows as operating,investing,financing,and other activities C

Question 2

Over long periods of time,the average P/E ratio of firms in the U.S.stock market is closest to ________.

Accepted Answer

A) 0.2 
B) 2.0 
C) 20 
D) 200 
A) 0.2 
B) 2.0 
C) 20 
D) 200 C

Question 3

Information on the accounting policies,procedures,calculations,and transactions underlying entries in the financial statements can be found on ________.

Accepted Answer

A) the notes to the financial statements 
B) the statement of retained earnings 
C) the proxy statement 
D) the management discussion and analysis (MD&
A)  
A) the notes to the financial statements 
B) the statement of retained earnings 
C) the proxy statement 
D) the management discussion and analysis (MD&
A)  A

Question 4

Earnings per share represents amount earned during the period on each outstanding share of common stock.

Accepted Answer

A) True 
 B)False

Question 5

The Sarbanes-Oxley Act of 2002 established the Public Company Accounting Oversight Board (PCAOB)which is a not-for-profit corporation that oversees auditors of public corporations.

Accepted Answer

A) True 
 B)False

Question 6

Table 3.2
Dana Dairy Products Key Ratios   Income Statement
Dana Dairy Products
For the Year Ended December 31,2019   Balance Sheet
Dana Dairy Products
December 31,2019  
-The return on total assets for Dana Dairy Products for 2019 was ________.(See Table 3.2)

Accepted Answer

A) 0.9 percent 
B) 5.5 percent 
C) 25 percent 
D) 2.5 percent 
A) 0.9 percent 
B) 5.5 percent 
C) 25 percent 
D) 2.5 percent

Question 7

The 2002 law that established the Public Company Accounting Oversight Board (PCAOB)was called ________.

Accepted Answer

A) the McCain-Feingold Act 
B) the Harkins-Oxley Act 
C) the Sarbanes-Harkins Act 
D) the Sarbanes-Oxley Act 
A) the McCain-Feingold Act 
B) the Harkins-Oxley Act 
C) the Sarbanes-Harkins Act 
D) the Sarbanes-Oxley Act

Question 8

Firm ABC had operating profits of $100,000,taxes of $17,000,interest expense of $34,000,and preferred dividends of $5,000.What was the firm's net profit after taxes?

Accepted Answer

A) $66,000 
B) $49,000 
C) $44,000 
D) $83,000 
A) $66,000 
B) $49,000 
C) $44,000 
D) $83,000

Question 9

During the 2008-2009 recession,the average P/E ratio of firms in the U.S.stock market reached an extraordinarily high level because ________.

Accepted Answer

A) investors believed short-term growth prospects for U.S.firms were extraordinarily good at that time 
B) stock prices generally boomed during the recession 
C) earnings per share were unusually low during the recession 
D) investors believed long-term growth prospects coming out of the recession were not very good 
A) investors believed short-term growth prospects for U.S.firms were extraordinarily good at that time 
B) stock prices generally boomed during the recession 
C) earnings per share were unusually low during the recession 
D) investors believed long-term growth prospects coming out of the recession were not very good

Question 10

The more money a firm borrows ________.

Accepted Answer

A) the lower is its ROE because more interest expense reduces earnings 
B) the larger is the gap between its ROA and its ROE 
C) the lower is its operating profit margin 
D) the higher is its gross profit margin 
A) the lower is its ROE because more interest expense reduces earnings 
B) the larger is the gap between its ROA and its ROE 
C) the lower is its operating profit margin 
D) the higher is its gross profit margin

Question 11

A firm's annual stockholders' report ________.

Accepted Answer

A) is only accessible to the shareholders of the firm 
B) summarizes and documents the firm's financial activities during the past year 
C) documents the list of all investors who bought the firm's shares during the past year 
D) summarizes and documents the firm's financial plan and budgets during the past year 
A) is only accessible to the shareholders of the firm 
B) summarizes and documents the firm's financial activities during the past year 
C) documents the list of all investors who bought the firm's shares during the past year 
D) summarizes and documents the firm's financial plan and budgets during the past year

Question 12

The modified DuPont equation says that a firm with a low return on total assets can improve its return on equity,all else remaining the same,by ________.

Accepted Answer

A) financing more of its assets with debt 
B) increasing its total asset turnover 
C) using less debt 
D) decreasing its total asset turnover 
A) financing more of its assets with debt 
B) increasing its total asset turnover 
C) using less debt 
D) decreasing its total asset turnover

Question 13

A firm's year-end retained earnings balances are $670,000 and $560,000,for 2018 and 2019 respectively.The firm paid $10,000 in dividends in 2019.The firm's net profit after taxes in 2019 was ________.

Accepted Answer

A) -$100,000 
B) -$110,000 
C) $100,000 
D) $110,000 
A) -$100,000 
B) -$110,000 
C) $100,000 
D) $110,000

Question 14

________ analysis involves the comparison of different firms' financial ratios at the same point in time.

Accepted Answer

A) Time-series 
B) Cross-sectional 
C) Marginal 
D) Technical 
A) Time-series 
B) Cross-sectional 
C) Marginal 
D) Technical

Question 15

Complete the balance sheet for General Aviation,Inc.based on the following financial data.
Balance Sheet
General Aviation,Inc.
December 31,2019   Key Financial Data (2019)
1.Sales totaled $720,000.
2.The gross profit margin was 38.7 percent.
3.Inventory turned 6 times.
4.There are 360 days in a year.
5.The average collection period was 31 days.
6.The current ratio was 2.35.
7.The total asset turnover was 2.81.
8.The debt ratio was 49.4 percent.
9.Total current assets equal $159,565.

Accepted Answer

Balance Sheet Genera

Question 16

Key Financial Data   Income Statement,Dreamscape,Inc.
For the Year Ended December 31,2020   Prepare a common-size income statement for Dreamscape,Inc.for the year ended December 31,2020.Evaluate the company's performance against industry average ratios and against last year's results.

Accepted Answer

Common-Size Income Statement Dreamscape,

Question 17

Table 3.2
Dana Dairy Products Key Ratios   Income Statement
Dana Dairy Products
For the Year Ended December 31,2019   Balance Sheet
Dana Dairy Products
December 31,2019  
-The debt ratio for Dana Dairy Products in 2019 was ________.(See Table 3.2)

Accepted Answer

A) 50 percent 
B) 11 percent 
C) 55 percent 
D) 44 percent 
A) 50 percent 
B) 11 percent 
C) 55 percent 
D) 44 percent

Question 18

Which of the following is a fixed asset?

Accepted Answer

A) land 
B) accounts payable 
C) accruals 
D) notes payable 
A) land 
B) accounts payable 
C) accruals 
D) notes payable

Question 19

The ________ is useful in evaluating credit policies that a firm extends to its customers.

Accepted Answer

A) average payment period 
B) current ratio 
C) average collection period 
D) inventory turnover ratio 
A) average payment period 
B) current ratio 
C) average collection period 
D) inventory turnover ratio

Question 20

An analyst should be careful when conducting ratio analysis to ensure that ________.

Accepted Answer

A) the overall performance of a firm is not judged on a single ratio 
B) the role of inflation is ignored 
C) ratios being compared should be calculated using financial statements dated at different points in time during the year 
D) different accounting procedures are used 
A) the overall performance of a firm is not judged on a single ratio 
B) the role of inflation is ignored 
C) ratios being compared should be calculated using financial statements dated at different points in time during the year 
D) different accounting procedures are used

The statement of cash flows ________.

Over long periods of time,the average P/E ratio of firms in the U.S.stock market is closest to ________.

Information on the accounting policies,procedures,calculations,and transactions underlying entries in the financial statements can be found on ________.

Earnings per share represents amount earned during the period on each outstanding share of common stock.

The Sarbanes-Oxley Act of 2002 established the Public Company Accounting Oversight Board (PCAOB)which is a not-for-profit corporation that oversees auditors of public corporations.

Table 3.2 Dana Dairy Products Key Ratios Income Statement Dana Dairy Products For the Year Ended December 31,2019 Balance Sheet Dana Dairy Products December 31,2019 -The return on total assets for Dana Dairy Products for 2019 was ________.(See Table 3.2)

The 2002 law that established the Public Company Accounting Oversight Board (PCAOB)was called ________.

Firm ABC had operating profits of $100,000,taxes of $17,000,interest expense of $34,000,and preferred dividends of $5,000.What was the firm's net profit after taxes?

During the 2008-2009 recession,the average P/E ratio of firms in the U.S.stock market reached an extraordinarily high level because ________.

The more money a firm borrows ________.

A firm's annual stockholders' report ________.

The modified DuPont equation says that a firm with a low return on total assets can improve its return on equity,all else remaining the same,by ________.

A firm's year-end retained earnings balances are $670,000 and $560,000,for 2018 and 2019 respectively.The firm paid $10,000 in dividends in 2019.The firm's net profit after taxes in 2019 was ________.

________ analysis involves the comparison of different firms' financial ratios at the same point in time.

Key Financial Data Income Statement,Dreamscape,Inc. For the Year Ended December 31,2020 Prepare a common-size income statement for Dreamscape,Inc.for the year ended December 31,2020.Evaluate the company's performance against industry average ratios and against last year's results.

Table 3.2 Dana Dairy Products Key Ratios Income Statement Dana Dairy Products For the Year Ended December 31,2019 Balance Sheet Dana Dairy Products December 31,2019 -The debt ratio for Dana Dairy Products in 2019 was ________.(See Table 3.2)

Which of the following is a fixed asset?

The ________ is useful in evaluating credit policies that a firm extends to its customers.

An analyst should be careful when conducting ratio analysis to ensure that ________.

The Role of Managerial Finance

The Financial Market Environment

Long- and Short-Term Financial Planning

Time Value of Money

Interest Rates and Bond Valuation

Stock Valuation

Risk and Return

The Cost of Capital

Capital Budgeting Techniques

Capital Budgeting Cash Flows and Risk Refinements

Leverage and Capital Structure

Payout Policy

Working Capital and Current Assets Management

Current Liabilities Management

Filters

Exam 3: Financial Statements and Ratio Analysis

The statement of cash flows ________.

Over long periods of time,the average P/E ratio of firms in the U.S.stock market is closest to ________.

Information on the accounting policies,procedures,calculations,and transactions underlying entries in the financial statements can be found on ________.

Earnings per share represents amount earned during the period on each outstanding share of common stock.

The Sarbanes-Oxley Act of 2002 established the Public Company Accounting Oversight Board (PCAOB)which is a not-for-profit corporation that oversees auditors of public corporations.

Table 3.2 Dana Dairy Products Key Ratios Income Statement Dana Dairy Products For the Year Ended December 31,2019 Balance Sheet Dana Dairy Products December 31,2019 -The return on total assets for Dana Dairy Products for 2019 was ________.(See Table 3.2)

The 2002 law that established the Public Company Accounting Oversight Board (PCAOB)was called ________.

Firm ABC had operating profits of $100,000,taxes of $17,000,interest expense of $34,000,and preferred dividends of $5,000.What was the firm's net profit after taxes?

During the 2008-2009 recession,the average P/E ratio of firms in the U.S.stock market reached an extraordinarily high level because ________.

The more money a firm borrows ________.

A firm's annual stockholders' report ________.

The modified DuPont equation says that a firm with a low return on total assets can improve its return on equity,all else remaining the same,by ________.

A firm's year-end retained earnings balances are $670,000 and $560,000,for 2018 and 2019 respectively.The firm paid $10,000 in dividends in 2019.The firm's net profit after taxes in 2019 was ________.

________ analysis involves the comparison of different firms' financial ratios at the same point in time.

Key Financial Data Income Statement,Dreamscape,Inc. For the Year Ended December 31,2020 Prepare a common-size income statement for Dreamscape,Inc.for the year ended December 31,2020.Evaluate the company's performance against industry average ratios and against last year's results.

Table 3.2 Dana Dairy Products Key Ratios Income Statement Dana Dairy Products For the Year Ended December 31,2019 Balance Sheet Dana Dairy Products December 31,2019 -The debt ratio for Dana Dairy Products in 2019 was ________.(See Table 3.2)

Which of the following is a fixed asset?

The ________ is useful in evaluating credit policies that a firm extends to its customers.

An analyst should be careful when conducting ratio analysis to ensure that ________.

The Role of Managerial Finance

The Financial Market Environment

Long- and Short-Term Financial Planning

Time Value of Money

Interest Rates and Bond Valuation

Stock Valuation

Risk and Return

The Cost of Capital

Capital Budgeting Techniques

Capital Budgeting Cash Flows and Risk Refinements

Leverage and Capital Structure

Payout Policy

Working Capital and Current Assets Management

Current Liabilities Management

Filters