Question 1

Net income divided by net sales is equal to the:

Accepted Answer

A) Return on total assets. 
B) Profit margin. 
C) Current ratio. 
D) Total asset turnover. 
E) Days' sales in inventory. 
A) Return on total assets. 
B) Profit margin. 
C) Current ratio. 
D) Total asset turnover. 
E) Days' sales in inventory. B

Question 2

Current assets divided by current liabilities is equal to the:

Accepted Answer

A) Current ratio. 
B) Quick ratio. 
C) Debt ratio. 
D) Liquidity ratio. 
E) Solvency ratio. 
A) Current ratio. 
B) Quick ratio. 
C) Debt ratio. 
D) Liquidity ratio. 
E) Solvency ratio. A

Question 3

For internal users,one purpose of financial statement analysis is to provide information helpful in improving the company's efficiency and effectiveness in providing products and services.

Accepted Answer

A) True 
 B)False  True

Question 4

A company has sales of $5,417,000,a gross profit ratio of 35%,ending merchandise inventory of $201,425,and total current assets of $1,539,600.What is the days sales' in inventory ratio for the year?

Accepted Answer

A) 6.10 
B) 20.88 
C) 26.15 
D) 22.67 
E) 15.77 
A) 6.10 
B) 20.88 
C) 26.15 
D) 22.67 
E) 15.77

Question 5

Financial statement analysis is the application of analytical tools to general-purpose financial statements and related data for making business decisions.

Accepted Answer

A) True 
 B)False

Question 6

Horizontal analysis is used to reveal changes in the relative importance of each financial statement item.

Accepted Answer

A) True 
 B)False

Question 7

A company had a profit margin of 5%.If net income equaled $83,000 and average total assets equaled $45,000,how much were net sales?

Accepted Answer

A) $4,150 
B) $2,250 
C) $1,660,000 
D) $6,400 
E) $128,000 
A) $4,150 
B) $2,250 
C) $1,660,000 
D) $6,400 
E) $128,000

Question 8

Working capital is computed as current liabilities minus current assets.

Accepted Answer

A) True 
 B)False

Question 9

Vertical analysis is the comparison of a company's financial condition and performance through time.

Accepted Answer

A) True 
 B)False

Question 10

The use of horizontal and vertical analysis eliminates many differences between GAAP and IFRS,but the user must exercise some caution when drawing conclusions from these reports.

Accepted Answer

A) True 
 B)False

Question 11

Express the following income statement information in common-size percents and in trend percents using 2013 as the base year.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 12

The debt ratio,the equity ratio,pledged assets to secured liabilities,and times interest earned are all ___________________ ratios.

Accepted Answer

The answer of The debt ratio,the equity ratio,pledged assets to...

Question 13

Trend analysis is also called:

Accepted Answer

A) Financial analysis. 
B) Ratio analysis. 
C) Index number trend analysis. 
D) Industry analysis. 
E) Output analysis. 
A) Financial analysis. 
B) Ratio analysis. 
C) Index number trend analysis. 
D) Industry analysis. 
E) Output analysis.

Question 14

A company's balance sheet and income statement accounts follow:     
-What is the company's gross margin ratio for 2013?

Accepted Answer

A) 65% 
B) 35% 
C) 67% 
D) 33% 
E) 39% 
A) 65% 
B) 35% 
C) 67% 
D) 33% 
E) 39%

Question 15

_______________ are reports where financial amounts are placed side-by-side in columns on a single statement for analytical purposes.

Accepted Answer

Comparativ

Question 16

The return on total assets ratio is a profitability measure.

Accepted Answer

A) True 
 B)False

Question 17

Standards for comparison are necessary when making judgments about a company's financial performance.

Accepted Answer

A) True 
 B)False

Question 18

A company reported net income of $78,000 and had 15,000 common shares outstanding throughout the current year.At year-end,the price per share of the company's stock was $49.40.What is the company's year-end price-earnings ratio?

Accepted Answer

Earnings per share = $78,000/1

Question 19

A company's sales in 2012 were $280,000 and its sales in 2013 were $341,600.Using 2012 as the base year,what is the sales trend percent for 2013?

Accepted Answer

$341,600/$

Question 20

Financial statements with data for two or more successive accounting periods placed in columns side by side,sometimes with changes shown in dollar amounts and percents,are referred to as:

Accepted Answer

A) Period-to-period statements. 
B) Controlling statements. 
C) Successive statements. 
D) Comparative statements. 
E) Serial statements. 
A) Period-to-period statements. 
B) Controlling statements. 
C) Successive statements. 
D) Comparative statements. 
E) Serial statements.

Net income divided by net sales is equal to the:

Current assets divided by current liabilities is equal to the:

For internal users,one purpose of financial statement analysis is to provide information helpful in improving the company's efficiency and effectiveness in providing products and services.

A company has sales of $5,417,000,a gross profit ratio of 35%,ending merchandise inventory of $201,425,and total current assets of $1,539,600.What is the days sales' in inventory ratio for the year?

Financial statement analysis is the application of analytical tools to general-purpose financial statements and related data for making business decisions.

Horizontal analysis is used to reveal changes in the relative importance of each financial statement item.

A company had a profit margin of 5%.If net income equaled $83,000 and average total assets equaled $45,000,how much were net sales?

Working capital is computed as current liabilities minus current assets.

Vertical analysis is the comparison of a company's financial condition and performance through time.

The use of horizontal and vertical analysis eliminates many differences between GAAP and IFRS,but the user must exercise some caution when drawing conclusions from these reports.

Express the following income statement information in common-size percents and in trend percents using 2013 as the base year.

The debt ratio,the equity ratio,pledged assets to secured liabilities,and times interest earned are all ___________________ ratios.

Trend analysis is also called:

A company's balance sheet and income statement accounts follow: -What is the company's gross margin ratio for 2013?

_______________ are reports where financial amounts are placed side-by-side in columns on a single statement for analytical purposes.

The return on total assets ratio is a profitability measure.

Standards for comparison are necessary when making judgments about a company's financial performance.

A company reported net income of $78,000 and had 15,000 common shares outstanding throughout the current year.At year-end,the price per share of the company's stock was $49.40.What is the company's year-end price-earnings ratio?

A company's sales in 2012 were $280,000 and its sales in 2013 were $341,600.Using 2012 as the base year,what is the sales trend percent for 2013?

Financial statements with data for two or more successive accounting periods placed in columns side by side,sometimes with changes shown in dollar amounts and percents,are referred to as:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 13: Analyzing and Interpreting Financial Statements

Net income divided by net sales is equal to the:

Current assets divided by current liabilities is equal to the:

For internal users,one purpose of financial statement analysis is to provide information helpful in improving the company's efficiency and effectiveness in providing products and services.

A company has sales of $5,417,000,a gross profit ratio of 35%,ending merchandise inventory of $201,425,and total current assets of $1,539,600.What is the days sales' in inventory ratio for the year?

Financial statement analysis is the application of analytical tools to general-purpose financial statements and related data for making business decisions.

Horizontal analysis is used to reveal changes in the relative importance of each financial statement item.

A company had a profit margin of 5%.If net income equaled $83,000 and average total assets equaled $45,000,how much were net sales?

Working capital is computed as current liabilities minus current assets.

Vertical analysis is the comparison of a company's financial condition and performance through time.

The use of horizontal and vertical analysis eliminates many differences between GAAP and IFRS,but the user must exercise some caution when drawing conclusions from these reports.

Express the following income statement information in common-size percents and in trend percents using 2013 as the base year.

The debt ratio,the equity ratio,pledged assets to secured liabilities,and times interest earned are all ___________________ ratios.

Trend analysis is also called:

A company's balance sheet and income statement accounts follow: -What is the company's gross margin ratio for 2013?

_______________ are reports where financial amounts are placed side-by-side in columns on a single statement for analytical purposes.

The return on total assets ratio is a profitability measure.

Standards for comparison are necessary when making judgments about a company's financial performance.

A company reported net income of $78,000 and had 15,000 common shares outstanding throughout the current year.At year-end,the price per share of the company's stock was $49.40.What is the company's year-end price-earnings ratio?

A company's sales in 2012 were $280,000 and its sales in 2013 were $341,600.Using 2012 as the base year,what is the sales trend percent for 2013?

Financial statements with data for two or more successive accounting periods placed in columns side by side,sometimes with changes shown in dollar amounts and percents,are referred to as:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters