Question 1

The ______________ turnover ratio measures the effectiveness of an entity in generating sales revenue.

Accepted Answer

The answer of The ______________ turnover ratio measures the effectiveness...

Question 2

Which of the following statements is correct?

Accepted Answer

A)  Low liquidity ratios are undesirable. 
B)  High liquidity ratios may indicate excessive investments in unproductive current assets. 
C)  Low liquidity ratios can indicate liquidity problems. 
D)  All of the above statements are correct. 
A)  Low liquidity ratios are undesirable. 
B)  High liquidity ratios may indicate excessive investments in unproductive current assets. 
C)  Low liquidity ratios can indicate liquidity problems. 
D)  All of the above statements are correct.

Question 3

If the beginning balance of inventory is $16 000 and the ending balance is $30 000,credit sales for the period are $420 000 and cost of sales are $380 000,the days inventory calculation is:

Accepted Answer

A)  29 days. 
B)  22 days. 
C)  20 days. 
D)  26 days. 
A)  29 days. 
B)  22 days. 
C)  20 days. 
D)  26 days.

Question 4

If the days debtors ratio changes from 32 days to 38 days this indicates that:

Accepted Answer

A)  the entity is becoming more efficient at collecting money from trade debtors. 
B)  the time taken to collect money from trade debtors is increasing. 
C)  the time taken to sell inventory is increasing. 
D)  the time taken to pay suppliers of inventory is increasing. 
A)  the entity is becoming more efficient at collecting money from trade debtors. 
B)  the time taken to collect money from trade debtors is increasing. 
C)  the time taken to sell inventory is increasing. 
D)  the time taken to pay suppliers of inventory is increasing.

Question 5

________ before interest and tax divided by net finance costs equals times interest earned.

Accepted Answer

The answer of ________ before interest and tax divided by...

Question 6

From the information provided below,management of an entity calculate the return on assets (rounded to the nearest whole number)to be:
$\begin{array}{|l|r|}
\hline\text{ Net profit after-tax }&  \$ 109000  \
\hline \text{Net profit before interest and tax }& 152000 \
\hline \text{Beginning balance of total assets} & 620000 \
\hline \text{Ending balance of total assets} & 840000 \
\hline
\end{array}$

Accepted Answer

A)  15% 
B)  21% 
C)  18% 
D)  13% 
A)  15% 
B)  21% 
C)  18% 
D)  13%

Question 7

Average inventory divided by cost of sales equals the ______________ inventory ratio.

Accepted Answer

The answer of Average inventory divided by cost of sales...

Question 8

If the market share price is $20 and the earnings per share is calculated to be $2.50,the price earnings ratio is:

Accepted Answer

A)  4 times. 
B)  5 times. 
C)  8 times. 
D)  12.5 times. 
A)  4 times. 
B)  5 times. 
C)  8 times. 
D)  12.5 times.

Question 9

The information provided by financial statements alone is not enough to form predictions about an entity's financial ___________.

Accepted Answer

The answer of The information provided by financial statements alone...

Question 10

Which of the following statements concerning price earnings ratio (PER)is true?

Accepted Answer

A)  PER is calculated as current market price divided by dividends per share. 
B)  PER is calculated as total shareholders' equity divided by earnings per share. 
C)  PERs are commonly between 10 and 15 times for industrial companies. 
D)  PER is not affected by a change in the share price. 
A)  PER is calculated as current market price divided by dividends per share. 
B)  PER is calculated as total shareholders' equity divided by earnings per share. 
C)  PERs are commonly between 10 and 15 times for industrial companies. 
D)  PER is not affected by a change in the share price.

Question 11

Which of the following statements about horizontal analysis is correct?

Accepted Answer

A)  it requires a minimum of 3 years of data to provide meaningful analysis. 
B)  it compares numbers reported on a financial statement to others on the same statement. 
C)  it compares numbers reported on the financial statements in the current period with those from the previous period. 
D)  it determines the profitability of an entity. 
A)  it requires a minimum of 3 years of data to provide meaningful analysis. 
B)  it compares numbers reported on a financial statement to others on the same statement. 
C)  it compares numbers reported on the financial statements in the current period with those from the previous period. 
D)  it determines the profitability of an entity.

Question 12

The quick ratio is used to determine an entity's:

Accepted Answer

A)  liquidity. 
B)  profitability. 
C)  efficiency. 
D)  performance. 
A)  liquidity. 
B)  profitability. 
C)  efficiency. 
D)  performance.

Question 13

____________________ is excluded from the quick ratio as it is the asset that takes the longest to convert to cash.

Accepted Answer

The answer of ____________________ is excluded from the quick ratio...

Question 14

A high times debtors turnover indicates:

Accepted Answer

A)  the entity's credit sales have decreased. 
B)  a small percentage of the entity's sales are on credit. 
C)  the entity is more efficient in collecting monies owing from customers. 
D)  customers are taking longer to pay their accounts. 
A)  the entity's credit sales have decreased. 
B)  a small percentage of the entity's sales are on credit. 
C)  the entity is more efficient in collecting monies owing from customers. 
D)  customers are taking longer to pay their accounts.

Question 15

Baxter Trading Pty Ltd has the following balance sheet figures.The debt ratio is:
$\begin{array}{|l|r|}
\hline \text{Current assets }& \$ 300000  \
\hline\text{ Current liabilities} & 200000 \
\hline\text{ Non-current assets} & 800000 \
\hline \text{Non-current liabilities} & 350000 \
\hline
\end{array}$

Accepted Answer

A)  50% 
B)  43.75% 
C)  66.67% 
D)  31.82% 
A)  50% 
B)  43.75% 
C)  66.67% 
D)  31.82%

Question 16

Calculate the cash flow to sales ratio using the following data.
$\begin{array}{|l|r|}
\hline \text{Sales revenue} &  \$ 650000  \
\hline \text{Ending cash balance for the period} & 22500 \
\hline \text{Net cash inflow from operating activities} & 84000 \
\hline
\end{array}$

Accepted Answer

A)  3.46% 
B)  7.74% 
C)  9.46% 
D)  12.92% 
A)  3.46% 
B)  7.74% 
C)  9.46% 
D)  12.92%

Question 17

Capital structure ratios are also known as:

Accepted Answer

A)  profitability ratios. 
B)  liquidity ratios. 
C)  gearing ratios. 
D)  efficiency ratios. 
A)  profitability ratios. 
B)  liquidity ratios. 
C)  gearing ratios. 
D)  efficiency ratios.

Question 18

Which of the following statements is not true?

Accepted Answer

A)  If the equity ratio is less than 50% then the entity is more reliant on debt funding than equity funding. 
B)  The sum of the debt ratio and the equity ratio does not have to equal 100%. 
C)  The debt ratio indicates how many dollars of debt exist per dollar of assets. 
D)  If the debt to equity ratio is more than 100%, the entity is more reliant on debt funding than equity funding. 
A)  If the equity ratio is less than 50% then the entity is more reliant on debt funding than equity funding. 
B)  The sum of the debt ratio and the equity ratio does not have to equal 100%. 
C)  The debt ratio indicates how many dollars of debt exist per dollar of assets. 
D)  If the debt to equity ratio is more than 100%, the entity is more reliant on debt funding than equity funding.

Question 19

Ratios can be impacted by the accounting policy choices and ___________ made by an entity.

Accepted Answer

The answer of Ratios can be impacted by the accounting...

Question 20

The current ratio is also known as the:

Accepted Answer

A)  working capital ratio. 
B)  cash flow ratio. 
C)  quick ratio. 
D)  acid-test ratio. 
A)  working capital ratio. 
B)  cash flow ratio. 
C)  quick ratio. 
D)  acid-test ratio.

The ______________ turnover ratio measures the effectiveness of an entity in generating sales revenue.

Which of the following statements is correct?

If the beginning balance of inventory is $16 000 and the ending balance is $30 000,credit sales for the period are $420 000 and cost of sales are $380 000,the days inventory calculation is:

If the days debtors ratio changes from 32 days to 38 days this indicates that:

________ before interest and tax divided by net finance costs equals times interest earned.

From the information provided below,management of an entity calculate the return on assets (rounded to the nearest whole number)to be: Net profit after-tax \ 109000 Net profit before interest and tax 152000 Beginning balance of total assets 620000 Ending balance of total assets 840000

Average inventory divided by cost of sales equals the ______________ inventory ratio.

If the market share price is $20 and the earnings per share is calculated to be $2.50,the price earnings ratio is:

The information provided by financial statements alone is not enough to form predictions about an entity's financial ___________.

Which of the following statements concerning price earnings ratio (PER)is true?

Which of the following statements about horizontal analysis is correct?

The quick ratio is used to determine an entity's:

____________________ is excluded from the quick ratio as it is the asset that takes the longest to convert to cash.

A high times debtors turnover indicates:

Baxter Trading Pty Ltd has the following balance sheet figures.The debt ratio is: Current assets \ 300000 Current liabilities 200000 Non-current assets 800000 Non-current liabilities 350000

Calculate the cash flow to sales ratio using the following data. Sales revenue \ 650000 Ending cash balance for the period 22500 Net cash inflow from operating activities 84000

Capital structure ratios are also known as:

Which of the following statements is not true?

Ratios can be impacted by the accounting policy choices and ___________ made by an entity.

The current ratio is also known as the:

Introduction to Accounting and Business Decision Making

Accounting in Society

Business Structures

Business Transactions

Balance Sheet

Statement of Profit or Loss and Statement of Changes in Equity

Statement of Cash Flows

Budgeting

Costvolumeprofit Analysis

Costing and Pricing in an Entity

Capital Investment

Financing the Business

Performance Measurement

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Exam 8: Analysis and Interpretation of Financial Statements

The ______________ turnover ratio measures the effectiveness of an entity in generating sales revenue.

Which of the following statements is correct?

If the beginning balance of inventory is $16 000 and the ending balance is $30 000,credit sales for the period are $420 000 and cost of sales are $380 000,the days inventory calculation is:

If the days debtors ratio changes from 32 days to 38 days this indicates that:

________ before interest and tax divided by net finance costs equals times interest earned.

From the information provided below,management of an entity calculate the return on assets (rounded to the nearest whole number)to be: Net profit after-tax \ 109000 Net profit before interest and tax 152000 Beginning balance of total assets 620000 Ending balance of total assets 840000

Average inventory divided by cost of sales equals the ______________ inventory ratio.

If the market share price is $20 and the earnings per share is calculated to be $2.50,the price earnings ratio is:

The information provided by financial statements alone is not enough to form predictions about an entity's financial ___________.

Which of the following statements concerning price earnings ratio (PER)is true?

Which of the following statements about horizontal analysis is correct?

The quick ratio is used to determine an entity's:

____________________ is excluded from the quick ratio as it is the asset that takes the longest to convert to cash.

A high times debtors turnover indicates:

Baxter Trading Pty Ltd has the following balance sheet figures.The debt ratio is: Current assets \ 300000 Current liabilities 200000 Non-current assets 800000 Non-current liabilities 350000

Calculate the cash flow to sales ratio using the following data. Sales revenue \ 650000 Ending cash balance for the period 22500 Net cash inflow from operating activities 84000

Capital structure ratios are also known as:

Which of the following statements is not true?

Ratios can be impacted by the accounting policy choices and ___________ made by an entity.

The current ratio is also known as the:

Introduction to Accounting and Business Decision Making

Accounting in Society

Business Structures

Business Transactions

Balance Sheet

Statement of Profit or Loss and Statement of Changes in Equity

Statement of Cash Flows

Budgeting

Costvolumeprofit Analysis

Costing and Pricing in an Entity

Capital Investment

Financing the Business

Performance Measurement

Filters