Exam 2: Introduction to Financial Statement Analysis

Use the table for the question(s)below. -If the above balance sheet is for a retail company, what indications about this company would best be drawn from the changes in quick ratio between 2017 and 2018?

Use the table for the question(s)below. -If the above balance sheet is for a retail company, how has the company's leverage changed between 2017 and 2018?

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

A manufacturer of plastic bottles for the medical trade purchases a new compression blow moulder for its bottle production plant. How will the cost to the company of this piece of equipment be recorded?

Use the table for the question(s)below. -Consider the above statement of cash flows. Which of the following is true of AOS Industries' operating cash flows?

What is the need for the notes to the financial statements when the firm's operations are already documented in the financial statements?

What is the role of an auditor in financial statement analysis?

Which of the following statements regarding the balance sheet is INCORRECT?

What is a firm's 'net income'?

How can we cross-check the statement of cash flows?

Luther Corporation Consolidated Balance Sheet 30 June 2017 and 2018 (in $ millions) -Refer to the balance sheet above. When using the book value of equity, the debt-equity ratio for Luther in 2017 is closest to:

Use the table for the question(s)below. Luther Corporation Consolidated Income Statement Year ended 30 June (in $ millions) -Refer to the income statement above. Luther's return on assets (ROA)for the year ending 30 June 2018 is closest to:

The balance sheet shows the assets, liabilities, and shareholders' equity of a firm at a given point in time.

Use the table for the question(s)below. -If the above balance sheet is for a retail company, what indications about this company would best be drawn from the changes in shareholders' equity between 2017 and 2018?

Use the table for the question(s)below. Luther Corporation Consolidated Income Statement Year ended 30 June (in $ millions) -Refer to the income statement above. Assuming that Luther has no convertible bonds outstanding, then for the year ending 30 June 2018, Luther's diluted earnings per share are closest to:

Manufacturer A has a profit margin of 2.0%, an asset turnover of 1.7 and an equity multiplier of 4.9. Manufacturer B has a profit margin of 2.3%, an asset turnover of 1.1 and an equity multiplier of 4.7. How much asset turnover should manufacturer B have to match manufacturer A's ROE?

What is the main problem in using a balance sheet to provide an accurate assessment of the value of a company's equity?

Accounts payable is a

How does a firm select the date for preparation of its balance sheet?

Which of the following is NOT a reason that the income statement does not accurately indicate how much cash a firm has earned?