Question 1

How competitors calculate amortization is most likely to affect comparisons between competitors if property,plant,and equipment:

Accepted Answer

A) makes up a large percent of assets and average useful lives are fairly different. 
B) makes up a small percent of assets and assets are financed in a different way. 
C) makes up a small percent of assets and average useful lives are fairly similar. 
D) is primarily leased in the industry,not purchased. 
A) makes up a large percent of assets and average useful lives are fairly different. 
B) makes up a small percent of assets and assets are financed in a different way. 
C) makes up a small percent of assets and average useful lives are fairly similar. 
D) is primarily leased in the industry,not purchased.

Question 2

The P/E ratio for the last 12 months for the company below is most likely to be calculated as which of the following?

Accepted Answer

A) 26.6 
B) 31.25 
C) 0.01 
D) 25.0 
A) 26.6 
B) 31.25 
C) 0.01 
D) 25.0

Question 3

Company X has a P/E ratio of 16 in year 2009 and 16.5 in 2010.In 2011 its P/E ratio is 24.The best way to interpret these data is to conclude that:

Accepted Answer

A) the shares are overpriced and should be sold. 
B) the shares have great growth capacity and should be bought. 
C) other financial results and news should be examined to determine the cause of the P/E ratio change. 
D) the shares are under-priced and should be bought. 
A) the shares are overpriced and should be sold. 
B) the shares have great growth capacity and should be bought. 
C) other financial results and news should be examined to determine the cause of the P/E ratio change. 
D) the shares are under-priced and should be bought.

Question 4

Nonrecurring items on the income statement are:

Accepted Answer

A) reported net of income tax. 
B) reported before income tax expense. 
C) not subject to income tax. 
D) none of the above. 
A) reported net of income tax. 
B) reported before income tax expense. 
C) not subject to income tax. 
D) none of the above.

Question 5

If a company extends its payment period for customers,its quality of income ratio is likely to rise.
BT: Comprehension

Accepted Answer

A) True 
 B)False

Question 6

If net income is rising,but both sales and the gross profit percentage remain the same,then:

Accepted Answer

A) operating expenses are falling. 
B) operating expenses are rising. 
C) cost of goods sold is falling. 
D) cost of goods sold is rising. 
A) operating expenses are falling. 
B) operating expenses are rising. 
C) cost of goods sold is falling. 
D) cost of goods sold is rising.

Question 7

Purrfect Pets,Inc.,had 1,588,000,1,662,000 and 1,558,000 shares of outstanding common shares at the end of 2006,2007,and 2008,respectively.Use this information and that set below to calculate the:
A.Year-over-year growth rate for the company's sales revenue.
B.Year-over-year growth rate for the company's net income.
C.Earnings per share for 2007 and 2008.
D.Times interest earned ratio for 2007 and 2008.

Accepted Answer

A.Growth rate for the company's sales re

Question 8

A company's comparative balance sheets show total assets for 2012 and 2011 as $990,000 and $900,000,respectively.What is the percentage change to be reported in the horizontal analysis?

Accepted Answer

A) Increase of 10% 
B) Decrease of 10% 
C) Increase of 9% 
D) Decrease of 9% 
A) Increase of 10% 
B) Decrease of 10% 
C) Increase of 9% 
D) Decrease of 9%

Question 9

A decrease in accounts receivable turnover ratio is indicative of:

Accepted Answer

A) an increase in sales revenue. 
B) slower selling inventory. 
C) an increase in accounts receivable. 
D) a decline in cost of good sold. 
A) an increase in sales revenue. 
B) slower selling inventory. 
C) an increase in accounts receivable. 
D) a decline in cost of good sold.

Question 10

Calculate the quality of income ratio for the current year.

Accepted Answer

A) 0.73 
B) 0.97 
C) 1.03 
D) 1.38 
A) 0.73 
B) 0.97 
C) 1.03 
D) 1.38

Question 11

If you wish to examine the relationships among various items reported in one or more of the financial statements,you are most likely to use:

Accepted Answer

A) time-series analysis. 
B) ratio analysis. 
C) horizontal analysis. 
D) cross-sectional analysis. 
A) time-series analysis. 
B) ratio analysis. 
C) horizontal analysis. 
D) cross-sectional analysis.

Question 12

The debt-to-assets ratio is the:

Accepted Answer

A) ratio of current liabilities to current assets. 
B) same calculation as the current ratio,but with total assets instead of short-term assets. 
C) ratio of total liabilities to total assets. 
D) proportion of total liabilities financed by creditors. 
A) ratio of current liabilities to current assets. 
B) same calculation as the current ratio,but with total assets instead of short-term assets. 
C) ratio of total liabilities to total assets. 
D) proportion of total liabilities financed by creditors.

Question 13

Match the letter for the following ratio measures to the category of performance that the ratio is used to measure.
P - Profitability
L - Liquidity
S - Solvency
___ Debt-to-assets ratio
___ Receivables turnover ratio
___ Fixed asset turnover ratio
___ Current ratio
___ Return on equity
___ Capital acquisitions ratio
___ Times interest earned ratio
___ Quality of income ratio
___ Inventory turnover ratio
___ Earnings per share

Accepted Answer

The answer of Match the letter for the following ratio...

Question 14

Analysts typically use a running four-week average for the shares price in the P/E ratio.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 15

Calculate the company's days to collect ratio for the current year?

Accepted Answer

A) 91.25 
B) 84.88 
C) 57.84 
D) 34.37 
A) 91.25 
B) 84.88 
C) 57.84 
D) 34.37

Question 16

If an analyst wants to examine a company's current ability to generate income,which of the following would best be considered?

Accepted Answer

A) Liquidity 
B) Market share 
C) Profitability 
D) Solvency 
A) Liquidity 
B) Market share 
C) Profitability 
D) Solvency

Question 17

Which of the following measures would assist in assessing the profitability of a company?

Accepted Answer

A) Quality of income ratio 
B) Times interest earned ratio 
C) Inventory turnover ratio 
D) Capital acquisitions ratio 
A) Quality of income ratio 
B) Times interest earned ratio 
C) Inventory turnover ratio 
D) Capital acquisitions ratio

Question 18

Trend data can be measured in dollar amounts or percentages.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 19

If an analyst wanted to examine a company's long-run ability to survive,which of the following would best be considered?

Accepted Answer

A) Liquidity 
B) Market share 
C) Profitability 
D) Solvency 
A) Liquidity 
B) Market share 
C) Profitability 
D) Solvency

Question 20

Match the term and the definition.Not all definitions will be used.
_____ Ratio analysis
_____ Reliability
_____ Liquidity
_____ Historical cost principle
_____ Going-concern problem
_____ Profitability
_____ Consistency
_____ Solvency
_____ Trend analysis
_____ Revenue recognition principle
A.The ability of a company to meet its short-run financial obligations.
B.The difficulties a company faces in acquiring financing when first starting up.
C.The principle that companies need to adjust their accounts for inflation.
D.Also known as time-series analysis.
E.The characteristic of financial reporting that requires a company to use the same principles over time to measure financial data.
F.The principle that companies should record transactions at the cash-equivalent cost on the date of the transaction.
G.The principle that revenues should be recognized immediately upon payment.
H.The characteristic that financial results should be able to be independently verified.
I.A measure of current earnings performance.
J.An analysis that compares a company's results to other companies in the industry.
K.A measure of long-run survivability.
L.The principle that revenue should be recorded when earned,provided payment is reasonably expected.
M.Measures that relate one financial variable to another from the same financial statement.
N.The constraint that financial data needs to be similar to other firms in the industry.
O.The characteristic that financial information needs to be valuable to decision makers.
P.When a company's near-term financial survival is questionable.

Accepted Answer

The answer of Match the term and the definition.Not all...

How competitors calculate amortization is most likely to affect comparisons between competitors if property,plant,and equipment:

The P/E ratio for the last 12 months for the company below is most likely to be calculated as which of the following?

Company X has a P/E ratio of 16 in year 2009 and 16.5 in 2010.In 2011 its P/E ratio is 24.The best way to interpret these data is to conclude that:

Nonrecurring items on the income statement are:

If a company extends its payment period for customers,its quality of income ratio is likely to rise. BT: Comprehension

If net income is rising,but both sales and the gross profit percentage remain the same,then:

A company's comparative balance sheets show total assets for 2012 and 2011 as $990,000 and $900,000,respectively.What is the percentage change to be reported in the horizontal analysis?

A decrease in accounts receivable turnover ratio is indicative of:

Calculate the quality of income ratio for the current year.

If you wish to examine the relationships among various items reported in one or more of the financial statements,you are most likely to use:

The debt-to-assets ratio is the:

Analysts typically use a running four-week average for the shares price in the P/E ratio. BT: Knowledge

Calculate the company's days to collect ratio for the current year?

If an analyst wants to examine a company's current ability to generate income,which of the following would best be considered?

Which of the following measures would assist in assessing the profitability of a company?

Trend data can be measured in dollar amounts or percentages. BT: Knowledge

If an analyst wanted to examine a company's long-run ability to survive,which of the following would best be considered?

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments,financial Statements,and Financial Results

Fraud,internal Control,and Cash

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables, bad Debt Expense, and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement Cash Flows

Filters

Exam 13: Measuring and Evaluating Financial Performance

How competitors calculate amortization is most likely to affect comparisons between competitors if property,plant,and equipment:

The P/E ratio for the last 12 months for the company below is most likely to be calculated as which of the following?

Company X has a P/E ratio of 16 in year 2009 and 16.5 in 2010.In 2011 its P/E ratio is 24.The best way to interpret these data is to conclude that:

Nonrecurring items on the income statement are:

If a company extends its payment period for customers,its quality of income ratio is likely to rise. BT: Comprehension

If net income is rising,but both sales and the gross profit percentage remain the same,then:

A company's comparative balance sheets show total assets for 2012 and 2011 as $990,000 and $900,000,respectively.What is the percentage change to be reported in the horizontal analysis?

A decrease in accounts receivable turnover ratio is indicative of:

Calculate the quality of income ratio for the current year.

If you wish to examine the relationships among various items reported in one or more of the financial statements,you are most likely to use:

The debt-to-assets ratio is the:

Analysts typically use a running four-week average for the shares price in the P/E ratio. BT: Knowledge

Calculate the company's days to collect ratio for the current year?

If an analyst wants to examine a company's current ability to generate income,which of the following would best be considered?

Which of the following measures would assist in assessing the profitability of a company?

Trend data can be measured in dollar amounts or percentages. BT: Knowledge

If an analyst wanted to examine a company's long-run ability to survive,which of the following would best be considered?

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments,financial Statements,and Financial Results

Fraud,internal Control,and Cash

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables, bad Debt Expense, and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement Cash Flows

Filters