Question 1

For some types of assets,such as plant,property and equipment,asset growth typically ____________________ future sales growth.

Accepted Answer

The answer of For some types of assets,such as plant,property...

Question 2

Common-size financial statements recast each statement item as:

Accepted Answer

A)  a percentage of the "bottom line." 
B)  a percentage using industry averages for the "base number." 
C)  a percentage using a base year number for each line item. 
D)  a percentage of some "base number" on the financial statement in question. 
A)  a percentage of the "bottom line." 
B)  a percentage using industry averages for the "base number." 
C)  a percentage using a base year number for each line item. 
D)  a percentage of some "base number" on the financial statement in question.

Question 3

Card Sharks,Inc.
Card Sharks,Inc.sells baseball cards and other memorabilia.The company tries to maintain a cash balance equivalent to approximately 30 days of sales.Sales in 2011 amounted to $352,412 and the company expects growth in 2012 of 30% and in 2013 of 35%.
-Given the information provided about Card Sharks,what is the company's 2013 projected cash balance?

Accepted Answer

A)  $53,934 
B)  $49,524 
C)  $21,873 
D)  $50,820 
A)  $53,934 
B)  $49,524 
C)  $21,873 
D)  $50,820

Question 4

To develop forecasts of individual assets,the analyst must first link historical growth rates for individual assets to historical growth rates in ____________________ and other activity-based drivers.

Accepted Answer

The answer of To develop forecasts of individual assets,the analyst...

Question 5

When projecting ____________________,the analyst should consider economy-wide factors such as the expected rate of general price inflation in the economy.

Accepted Answer

The answer of When projecting ____________________,the analyst should consider economy-wide...

Question 6

When projecting operating expenses,it is important to determine the mix of fixed and variable costs;one clue suggesting the presence of fixed costs is:

Accepted Answer

A)  the percentage change in cost of goods sold in prior years is significantly greater than the percentage change in sales. 
B)  the percentage change in cost of goods sold in prior years is significantly less than the percentage change in sales. 
C)  low capital intensity in the production process. 
D)  the percentage change in sales in prior years is significantly greater than the percentage change in receivables. 
A)  the percentage change in cost of goods sold in prior years is significantly greater than the percentage change in sales. 
B)  the percentage change in cost of goods sold in prior years is significantly less than the percentage change in sales. 
C)  low capital intensity in the production process. 
D)  the percentage change in sales in prior years is significantly greater than the percentage change in receivables.

Question 7

All of the following statements are true regarding ratios and forecasts except:

Accepted Answer

A)  Ratios cannot confirm whether forecast assumptions will turn out to be correct. 
B)  Ratios can tell whether future sales growth was accurately captured. 
C)  Ratios cannot tell whether assumptions about future cash flows are realistic. 
D)  Ratios can tell whether growth rates for sales are consistent with past sales growth performance. 
A)  Ratios cannot confirm whether forecast assumptions will turn out to be correct. 
B)  Ratios can tell whether future sales growth was accurately captured. 
C)  Ratios cannot tell whether assumptions about future cash flows are realistic. 
D)  Ratios can tell whether growth rates for sales are consistent with past sales growth performance.

Question 8

All of the following are true regarding the key principles of forecasting except:

Accepted Answer

A)  Financial statement forecasts need not be comprehensive. 
B)  Forecasts should not manifest wishful thinking. 
C)  Financial statement forecasts must be internally consistent. 
D)  Financial statement forecasts must rely on assumptions that have external validity. 
A)  Financial statement forecasts need not be comprehensive. 
B)  Forecasts should not manifest wishful thinking. 
C)  Financial statement forecasts must be internally consistent. 
D)  Financial statement forecasts must rely on assumptions that have external validity.

Question 9

Card Sharks,Inc.
Card Sharks,Inc.sells baseball cards and other memorabilia.The company tries to maintain a cash balance equivalent to approximately 30 days of sales.Sales in 2011 amounted to $352,412 and the company expects growth in 2012 of 30% and in 2013 of 35%.
-Given the information provided about Card Sharks,what are the company's 2013 projected annual sales?

Accepted Answer

A)  $656,191 
B)  $493,377 
C)  $618,482 
D)  $542,333 
A)  $656,191 
B)  $493,377 
C)  $618,482 
D)  $542,333

Question 10

The objective of forecasting is to develop:

Accepted Answer

A)  stand-alone financial statements for future analysis. 
B)  a set of realistic expectations for future value-relevant payoffs. 
C)  a balance sheet and income statement that articulate. 
D)  financial statements for comparison to industry averages. 
A)  stand-alone financial statements for future analysis. 
B)  a set of realistic expectations for future value-relevant payoffs. 
C)  a balance sheet and income statement that articulate. 
D)  financial statements for comparison to industry averages.

Question 11

Sparky's
Sparky's sells auto parts.Provided below is selected financial information from the company's 2012 annual report:
  
-Sparky's forecasts that sales will grow by 25% in 2013 and that its cost of goods sold to sales ratio will be the same in 2013 as it was in 2012.If these assumptions prove correct and Sparky's inventory turnover ratio for 2013 is 4.5 what will be the level of inventory at the end of 2013?

Accepted Answer

A)  $31,353 
B)  $26,475 
C)  $40,000 
D)  $42,314 
A)  $31,353 
B)  $26,475 
C)  $40,000 
D)  $42,314

Question 12

Financial statement forecasts should rely on ____________________ within financial statements.

Accepted Answer

The answer of Financial statement forecasts should rely on ____________________...

For some types of assets,such as plant,property and equipment,asset growth typically ____________________ future sales growth.

Common-size financial statements recast each statement item as:

To develop forecasts of individual assets,the analyst must first link historical growth rates for individual assets to historical growth rates in ____________________ and other activity-based drivers.

When projecting ____________________,the analyst should consider economy-wide factors such as the expected rate of general price inflation in the economy.

When projecting operating expenses,it is important to determine the mix of fixed and variable costs;one clue suggesting the presence of fixed costs is:

All of the following statements are true regarding ratios and forecasts except:

All of the following are true regarding the key principles of forecasting except:

The objective of forecasting is to develop:

Financial statement forecasts should rely on ____________________ within financial statements.

Overview of Financial Reporting,financial Statement Analysis,and Valuation

Asset and Liability Valuation and Income Recognition

Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

Profitability Analysis

Risk Analysis

Accounting Quality

Financing Activities

Investing Activities

Operating Activities

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

Filters

Exam 10: Forecasting Financial Statements

For some types of assets,such as plant,property and equipment,asset growth typically ____________________ future sales growth.

Common-size financial statements recast each statement item as:

To develop forecasts of individual assets,the analyst must first link historical growth rates for individual assets to historical growth rates in ____________________ and other activity-based drivers.

When projecting ____________________,the analyst should consider economy-wide factors such as the expected rate of general price inflation in the economy.

When projecting operating expenses,it is important to determine the mix of fixed and variable costs;one clue suggesting the presence of fixed costs is:

All of the following statements are true regarding ratios and forecasts except:

All of the following are true regarding the key principles of forecasting except:

The objective of forecasting is to develop:

Financial statement forecasts should rely on ____________________ within financial statements.

Overview of Financial Reporting,financial Statement Analysis,and Valuation

Asset and Liability Valuation and Income Recognition

Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

Profitability Analysis

Risk Analysis

Accounting Quality

Financing Activities

Investing Activities

Operating Activities

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

Filters