Question 1

Financial analysis only refers to the communication of relevant financial information to decision makers.

Accepted Answer

A) True 
 B)False

Question 2

Capital structure refers to a company's long-run financial viability and its ability to cover long-term obligations.

Accepted Answer

A) True 
 B)False

Question 3

A corporation reported cash of $14,000 and total assets of $178,300. Its common-size percent for cash equals 7.85%.
($14,000/$178,300) * 100 = 7.85%

Accepted Answer

A) True 
 B)False

Question 4

Horizontal analysis:

Accepted Answer

A) Is a method used to evaluate changes in financial data across time. 
B) Is also called vertical analysis. 
C) Is the presentation of financial ratios. 
D) Is a tool used to evaluate financial statement items relative to industry statistics. 
E) Evaluates financial data across industries. 
A) Is a method used to evaluate changes in financial data across time. 
B) Is also called vertical analysis. 
C) Is the presentation of financial ratios. 
D) Is a tool used to evaluate financial statement items relative to industry statistics. 
E) Evaluates financial data across industries.

Question 5

Net income divided by net sales is 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.

Question 6

____________ is a method of analysis used to evaluate individual financial statement items or groups of items in terms of a specific base amount.

Accepted Answer

The answer of ____________ is a method of analysis used...

Question 7

A ratio expresses a mathematical relation between two quantities and can be expressed as a percent, rate, or proportion.

Accepted Answer

A) True 
 B)False

Question 8

Calculate the percent increases for each of the following balance sheet items.

Accepted Answer

The answer of Calculate the percent increases for each of...

Question 9

Liquidity refers to the availability of resources to meet short-term cash requirements.

Accepted Answer

A) True 
 B)False

Question 10

Ratios must refer to economically important relationships, such as a sale price compared to its cost.

Accepted Answer

A) True 
 B)False

Question 11

Current assets minus current liabilities is:

Accepted Answer

A) Profit margin. 
B) Financial leverage. 
C) Current ratio. 
D) Working capital. 
E) Quick assets. 
A) Profit margin. 
B) Financial leverage. 
C) Current ratio. 
D) Working capital. 
E) Quick assets.

Question 12

General-purpose financial statements include the (1) income statement, (2) balance sheet, (3) statement of stockholders' equity (or statement of retained earnings), (4) statement of cash flows, and (5) notes to these statements.

Accepted Answer

A) True 
 B)False

Question 13

The comparison of a company's financial condition and performance across time is known as:

Accepted Answer

A) Horizontal analysis. 
B) Vertical analysis. 
C) Political analysis. 
D) Financial reporting. 
E) Investment analysis. 
A) Horizontal analysis. 
B) Vertical analysis. 
C) Political analysis. 
D) Financial reporting. 
E) Investment analysis.

Question 14

Comparative calendar year financial data for a company are shown below. Calculate the following ratios for 2017:
(a) return on total assets
(b) return on common stockholders' equity.

Accepted Answer

The answer of Comparative calendar year financial data for a...

Question 15

The higher the accounts receivable turnover, the less quickly accounts receivable are collected.

Accepted Answer

A) True 
 B)False

Question 16

Refer to the following selected financial information from Keller Company. Compute the company's debt to equity for Year 2.

Accepted Answer

A) 0.9. 
B) 1.1. 
C) 0.5. 
D) 1.9. 
E) 2.1. 
A) 0.9. 
B) 1.1. 
C) 0.5. 
D) 1.9. 
E) 2.1.

Question 17

Earnings per share are calculated only on income from continuing operations.

Accepted Answer

A) True 
 B)False

Question 18

Trend analysis is a form of horizontal analysis that can reveal patterns in data across successive periods.

Accepted Answer

A) True 
 B)False

Question 19

Carducci Corporation reported Net Sales of $3.6 million and beginning Total Assets of $0.9 million and ending Total Assets of 1.3 million. The average total asset amount is:

Accepted Answer

A) $2.3 million. 
B) $2.7 million. 
C) $0.25 million. 
D) $0.36 million. 
E) $1.1 million. 
A) $2.3 million. 
B) $2.7 million. 
C) $0.25 million. 
D) $0.36 million. 
E) $1.1 million.

Question 20

Washburn Company reported sales of $1,722,000 for Year 1 and $1,831,000 for Year 2. Using Year 1 as the base year, what was the percentage change for sales from Year 1 to Year 2?

Accepted Answer

A) 6.33% decrease. 
B) 5.95% decrease. 
C) 6.33% increase. 
D) 5.95% increase. 
E) 6.17% increasE.(1,831,000 - 1,722,000)/1,722,000 = 6.33% increase 
A) 6.33% decrease. 
B) 5.95% decrease. 
C) 6.33% increase. 
D) 5.95% increase. 
E) 6.17% increasE.(1,831,000 - 1,722,000)/1,722,000 = 6.33% increase

Financial analysis only refers to the communication of relevant financial information to decision makers.

Capital structure refers to a company's long-run financial viability and its ability to cover long-term obligations.

A corporation reported cash of $14,000 and total assets of $178,300. Its common-size percent for cash equals 7.85%. ($14,000/$178,300) * 100 = 7.85%

Horizontal analysis:

Net income divided by net sales is the:

____________ is a method of analysis used to evaluate individual financial statement items or groups of items in terms of a specific base amount.

A ratio expresses a mathematical relation between two quantities and can be expressed as a percent, rate, or proportion.

Calculate the percent increases for each of the following balance sheet items.

Liquidity refers to the availability of resources to meet short-term cash requirements.

Ratios must refer to economically important relationships, such as a sale price compared to its cost.

Current assets minus current liabilities is:

General-purpose financial statements include the (1) income statement, (2) balance sheet, (3) statement of stockholders' equity (or statement of retained earnings), (4) statement of cash flows, and (5) notes to these statements.

The comparison of a company's financial condition and performance across time is known as:

Comparative calendar year financial data for a company are shown below. Calculate the following ratios for 2017: (a) return on total assets (b) return on common stockholders' equity.

The higher the accounts receivable turnover, the less quickly accounts receivable are collected.

Refer to the following selected financial information from Keller Company. Compute the company's debt to equity for Year 2.

Earnings per share are calculated only on income from continuing operations.

Trend analysis is a form of horizontal analysis that can reveal patterns in data across successive periods.

Carducci Corporation reported Net Sales of $3.6 million and beginning Total Assets of $0.9 million and ending Total Assets of 1.3 million. The average total asset amount is:

Washburn Company reported sales of $1,722,000 for Year 1 and $1,831,000 for Year 2. Using Year 1 as the base year, what was the percentage change for sales from Year 1 to Year 2?

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

Reporting and Analyzing Partnerships

Filters

Exam 13: Analyzing and Interpreting Financial Statements

Financial analysis only refers to the communication of relevant financial information to decision makers.

Capital structure refers to a company's long-run financial viability and its ability to cover long-term obligations.

A corporation reported cash of $14,000 and total assets of $178,300. Its common-size percent for cash equals 7.85%. ($14,000/$178,300) * 100 = 7.85%

Horizontal analysis:

Net income divided by net sales is the:

____________ is a method of analysis used to evaluate individual financial statement items or groups of items in terms of a specific base amount.

A ratio expresses a mathematical relation between two quantities and can be expressed as a percent, rate, or proportion.

Calculate the percent increases for each of the following balance sheet items.

Liquidity refers to the availability of resources to meet short-term cash requirements.

Ratios must refer to economically important relationships, such as a sale price compared to its cost.

Current assets minus current liabilities is:

General-purpose financial statements include the (1) income statement, (2) balance sheet, (3) statement of stockholders' equity (or statement of retained earnings), (4) statement of cash flows, and (5) notes to these statements.

The comparison of a company's financial condition and performance across time is known as:

Comparative calendar year financial data for a company are shown below. Calculate the following ratios for 2017: (a) return on total assets (b) return on common stockholders' equity.

The higher the accounts receivable turnover, the less quickly accounts receivable are collected.

Refer to the following selected financial information from Keller Company. Compute the company's debt to equity for Year 2.

Earnings per share are calculated only on income from continuing operations.

Trend analysis is a form of horizontal analysis that can reveal patterns in data across successive periods.

Carducci Corporation reported Net Sales of $3.6 million and beginning Total Assets of $0.9 million and ending Total Assets of 1.3 million. The average total asset amount is:

Washburn Company reported sales of $1,722,000 for Year 1 and $1,831,000 for Year 2. Using Year 1 as the base year, what was the percentage change for sales from Year 1 to Year 2?

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

Reporting and Analyzing Partnerships

Filters