Question 1

A financial statement line item expressed as a percentage of a base amount is a result of:

Accepted Answer

A) horizontal analysis. 
B) economic value added. 
C) vertical analysis. 
D) comparative analysis. 
A) horizontal analysis. 
B) economic value added. 
C) vertical analysis. 
D) comparative analysis.

Question 2

On a statement of cash flows of a healthy company,net income would ordinarily be:

Accepted Answer

A) less than depreciation expense. 
B) more than depreciation expense. 
C) greater than Net Cash Provided by Operating Activities. 
D) less than Net Cash Provided by Operating Activities. 
A) less than depreciation expense. 
B) more than depreciation expense. 
C) greater than Net Cash Provided by Operating Activities. 
D) less than Net Cash Provided by Operating Activities.

Question 3

Vertical analysis compares a line item on the balance sheet to the same line item on the balance sheet in a prior period.

Accepted Answer

A) True 
 B)False

Question 4

On a statement of cash flows,which is considered an investing activity?

Accepted Answer

A) Depreciation expense 
B) Increase in inventory 
C) Sale of securities 
D) Repayment of debt 
A) Depreciation expense 
B) Increase in inventory 
C) Sale of securities 
D) Repayment of debt

Question 5

In the statement of cash flows,purchases of fixed assets are considered to be investing activities.

Accepted Answer

A) True 
 B)False

Question 6

The ratio of the dollar amount of each individual asset to the dollar amount of total assets is an example of vertical analysis.

Accepted Answer

A) True 
 B)False

Question 7

Nekich Company reports the following sales figures(in millions):   What is the trend percentage in 2013 if 2008 is the base year?

Accepted Answer

A) 6% 
B) 14% 
C) 86% 
D) 94% 
A) 6% 
B) 14% 
C) 86% 
D) 94%

Question 8

If a company has sales of $150 in 2015 and $225 in 2016,the percentage change from 2015 to 2016 is 50%.

Accepted Answer

A) True 
 B)False

Question 9

Given the following data:   In vertical analysis,net income would be expressed as:

Accepted Answer

A) 18%. 
B) 45%. 
C) 30%. 
D) 82%. 
A) 18%. 
B) 45%. 
C) 30%. 
D) 82%.

Question 10

A vertical analysis is primarily concerned with:

Accepted Answer

A) the dollar amount of the change in various financial statement line items from year to year. 
B) individual financial statement line items expressed as a percentage of a base (which represents 100%). 
C) percentage changes in the balances of line items from comparative financial statements. 
D) the change in key financial statement ratios over a specified period of time. 
A) the dollar amount of the change in various financial statement line items from year to year. 
B) individual financial statement line items expressed as a percentage of a base (which represents 100%). 
C) percentage changes in the balances of line items from comparative financial statements. 
D) the change in key financial statement ratios over a specified period of time.

Question 11

Sales of fixed assets for several years is a sign of:

Accepted Answer

A) a struggling company. 
B) reinvestment in the company. 
C) a shortage of cash. 
D) A and C. 
A) a struggling company. 
B) reinvestment in the company. 
C) a shortage of cash. 
D) A and C.

Question 12

How is the trend percentage for sales in 2015 computed? The base year is 2000.

Accepted Answer

A) Year 2015 sales ÷ Year 2000 sales 
B) (Year 2015 sales - Year 2000 sales)÷ Year 2000 sales 
C) (Year 2015 sales - Year 2000 sales)÷ Year 2015 sales 
D) (Year 2015 sales ÷ Year 2000 sales)× 100 
A) Year 2015 sales ÷ Year 2000 sales 
B) (Year 2015 sales - Year 2000 sales)÷ Year 2000 sales 
C) (Year 2015 sales - Year 2000 sales)÷ Year 2015 sales 
D) (Year 2015 sales ÷ Year 2000 sales)× 100

Question 13

Mussa Corporation reports the following data:   In vertical analysis,the cost of goods sold percentage is closest to:

Accepted Answer

A) 36%. 
B) 57%. 
C) 64%. 
D) 175%. 
A) 36%. 
B) 57%. 
C) 64%. 
D) 175%.

Question 14

Zebra Company reports the following figures for the years ending December 31,2014 and 2013:   What are the percentage changes from 2013 to 2014 for Net Sales,Cost of Goods Sold and Gross Profit,respectively?

Accepted Answer

A) 100%,75.4%,24.6% 
B) 100%,77%,23% 
C) 35.4%,24.3%,26.9% 
D) 26.9%,24.3%,35.4% 
A) 100%,75.4%,24.6% 
B) 100%,77%,23% 
C) 35.4%,24.3%,26.9% 
D) 26.9%,24.3%,35.4%

Question 15

Reimer Company reports the following data:   When evaluating the results of operations,what can be said about Reimer Company?

Accepted Answer

A) Using vertical analysis,the company's profitability declined in 2014. 
B) Using horizontal analysis,the company's profitability declined in 2014. 
C) Using vertical analysis,the company's profitability declined in 2015. 
D) Using horizontal analysis,the company's profitability declined in 2015. 
A) Using vertical analysis,the company's profitability declined in 2014. 
B) Using horizontal analysis,the company's profitability declined in 2014. 
C) Using vertical analysis,the company's profitability declined in 2015. 
D) Using horizontal analysis,the company's profitability declined in 2015.

Question 16

Analyzing the statement of cash flows may help analysts determine the financial health of a company.Which of the following signs below is NOT an indicator of a financially healthy company?

Accepted Answer

A) The company's operations are a major source (not a use)of cash. 
B) The company's operations result in Net Cash Used by Operating Activities. 
C) The company's investing activities include more purchases than sales of long-term assets. 
D) The company's financing activities are not dominated by borrowing. 
A) The company's operations are a major source (not a use)of cash. 
B) The company's operations result in Net Cash Used by Operating Activities. 
C) The company's investing activities include more purchases than sales of long-term assets. 
D) The company's financing activities are not dominated by borrowing.

Question 17

If the sale of plant assets is a company's major source of cash,it may be a sign of financial difficulty.

Accepted Answer

A) True 
 B)False

Question 18

What do the price-earnings ratio and dividend yield have in common?

Accepted Answer

A) Earnings per share is the denominator for both ratios. 
B) Earnings per share is the numerators for both ratios. 
C) Dividends per share is in both ratios. 
D) Market price per share is in both ratios. 
A) Earnings per share is the denominator for both ratios. 
B) Earnings per share is the numerators for both ratios. 
C) Dividends per share is in both ratios. 
D) Market price per share is in both ratios.

Question 19

On a statement of cash flows(indirect method),an increase or decrease in inventory is considered:

Accepted Answer

A) an operating activity. 
B) an investing activity. 
C) a financing activity. 
D) an noncash investing or financing activity. 
A) an operating activity. 
B) an investing activity. 
C) a financing activity. 
D) an noncash investing or financing activity.

A financial statement line item expressed as a percentage of a base amount is a result of:

On a statement of cash flows of a healthy company,net income would ordinarily be:

Vertical analysis compares a line item on the balance sheet to the same line item on the balance sheet in a prior period.

On a statement of cash flows,which is considered an investing activity?

In the statement of cash flows,purchases of fixed assets are considered to be investing activities.

The ratio of the dollar amount of each individual asset to the dollar amount of total assets is an example of vertical analysis.

Nekich Company reports the following sales figures(in millions): What is the trend percentage in 2013 if 2008 is the base year?

If a company has sales of $150 in 2015 and $225 in 2016,the percentage change from 2015 to 2016 is 50%.

Given the following data: In vertical analysis,net income would be expressed as:

A vertical analysis is primarily concerned with:

Sales of fixed assets for several years is a sign of:

How is the trend percentage for sales in 2015 computed? The base year is 2000.

Mussa Corporation reports the following data: In vertical analysis,the cost of goods sold percentage is closest to:

Zebra Company reports the following figures for the years ending December 31,2014 and 2013: What are the percentage changes from 2013 to 2014 for Net Sales,Cost of Goods Sold and Gross Profit,respectively?

Reimer Company reports the following data: When evaluating the results of operations,what can be said about Reimer Company?

Analyzing the statement of cash flows may help analysts determine the financial health of a company.Which of the following signs below is NOT an indicator of a financially healthy company?

If the sale of plant assets is a company's major source of cash,it may be a sign of financial difficulty.

What do the price-earnings ratio and dividend yield have in common?

On a statement of cash flows(indirect method),an increase or decrease in inventory is considered:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets,natural Resources, Intangibles

Long-Term Investments: The Time Value of Money

Liabilities

Stockholders Equity

Evaluating Performance: Earnings Quality, the Income Statement, the Statement of Comprehensive Income

The Statement of Cash Flows

Filters

Exam 13: Financial Statement Analysis

A financial statement line item expressed as a percentage of a base amount is a result of:

On a statement of cash flows of a healthy company,net income would ordinarily be:

Vertical analysis compares a line item on the balance sheet to the same line item on the balance sheet in a prior period.

On a statement of cash flows,which is considered an investing activity?

In the statement of cash flows,purchases of fixed assets are considered to be investing activities.

The ratio of the dollar amount of each individual asset to the dollar amount of total assets is an example of vertical analysis.

Nekich Company reports the following sales figures(in millions): What is the trend percentage in 2013 if 2008 is the base year?

If a company has sales of $150 in 2015 and $225 in 2016,the percentage change from 2015 to 2016 is 50%.

Given the following data: In vertical analysis,net income would be expressed as:

A vertical analysis is primarily concerned with:

Sales of fixed assets for several years is a sign of:

How is the trend percentage for sales in 2015 computed? The base year is 2000.

Mussa Corporation reports the following data: In vertical analysis,the cost of goods sold percentage is closest to:

Zebra Company reports the following figures for the years ending December 31,2014 and 2013: What are the percentage changes from 2013 to 2014 for Net Sales,Cost of Goods Sold and Gross Profit,respectively?

Reimer Company reports the following data: When evaluating the results of operations,what can be said about Reimer Company?

Analyzing the statement of cash flows may help analysts determine the financial health of a company.Which of the following signs below is NOT an indicator of a financially healthy company?

If the sale of plant assets is a company's major source of cash,it may be a sign of financial difficulty.

What do the price-earnings ratio and dividend yield have in common?

On a statement of cash flows(indirect method),an increase or decrease in inventory is considered:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets,natural Resources, Intangibles

Long-Term Investments: The Time Value of Money

Liabilities

Stockholders Equity

Evaluating Performance: Earnings Quality, the Income Statement, the Statement of Comprehensive Income

The Statement of Cash Flows

Filters