Question 1

Martinez Corporation reported Net Sales of $765,000 and Net Income of $142,000. The profit margin is:

Accepted Answer

A) 539.0%. 
B) 5.39%. 
C) 81.4%. 
D) 1.86%. 
E) 18.56%. 
A) 539.0%. 
B) 5.39%. 
C) 81.4%. 
D) 1.86%. 
E) 18.56%.

Question 2

Vertical analysis is a tool to evaluate individual financial statement items or groups of items in terms of a specific base amount.

Accepted Answer

A) True 
 B)False

Question 3

A financial statement analysis report does not include:

Accepted Answer

A) An auditor statement. 
B) An analysis overview. 
C) Evidential matter. 
D) Qualitative and quantitative key factors. 
E) Inferences such as forecasts. 
A) An auditor statement. 
B) An analysis overview. 
C) Evidential matter. 
D) Qualitative and quantitative key factors. 
E) Inferences such as forecasts.

Question 4

Measures taken from a selected competitor or a group of competitors are often excellent standards of comparison for analysis.

Accepted Answer

A) True 
 B)False

Question 5

A company's sales in Year 1 were $280,000, and its sales in Year 2 were $341,600. Using Year 1 as the base year, what is the sales trend percent for Year 2?

Accepted Answer

$341,600/$

Question 6

One of several ratios that reflects solvency includes the:

Accepted Answer

A) Acid-test ratio. 
B) Current ratio. 
C) Times interest earned ratio. 
D) Total asset turnover. 
E) Days' sales in inventory. 
A) Acid-test ratio. 
B) Current ratio. 
C) Times interest earned ratio. 
D) Total asset turnover. 
E) Days' sales in inventory.

Question 7

Financial reporting refers to:

Accepted Answer

A) The application of analytical tools to general-purpose financial statements. 
B) The communication of financial information useful for decision making. 
C) General-purpose financial statements only. 
D) Ratio analysis only. 
E) Profitability. 
A) The application of analytical tools to general-purpose financial statements. 
B) The communication of financial information useful for decision making. 
C) General-purpose financial statements only. 
D) Ratio analysis only. 
E) Profitability.

Question 8

The comparative balance sheet for Silverlight Co. is shown below. Express the balance sheet in common-size percentages.

Accepted Answer

The answer of The comparative balance sheet for Silverlight Co....

Question 9

A corporation reports the following year-end balance sheet data. Calculate the following ratios:
(a) working capital
(b) acid-test ratio
(c) current ratio
(d) debt ratio
(e) equity ratio
(f) debt-to-equity ratio

Accepted Answer

The answer of A corporation reports the following year-end balance...

Question 10

Working capital is computed as current liabilities minus current assets.

Accepted Answer

A) True 
 B)False

Question 11

Financial statement analysis involves all of the following except:

Accepted Answer

A) The application of analytical tools to general-purpose financial statements and related data for making business decisions. 
B) Transforming accounting data into useful information for decision-making. 
C) Helping users to make better decisions. 
D) Helping to reduce uncertainty in decision-making. 
E) Assuring that the company will be more profitable in the future. 
A) The application of analytical tools to general-purpose financial statements and related data for making business decisions. 
B) Transforming accounting data into useful information for decision-making. 
C) Helping users to make better decisions. 
D) Helping to reduce uncertainty in decision-making. 
E) Assuring that the company will be more profitable in the future.

Question 12

Vertical analysis is the comparison of a company's financial condition and performance across time.

Accepted Answer

A) True 
 B)False

Question 13

Desjardin Landscaping's income statement reports net income of $75,300, which includes deductions for interest expense of $11,500 and income taxes of $34,900. Its times interest earned is:

Accepted Answer

A) 10.6 times 
B) 7.5 times 
C) 4.0 times 
D) 6.5 times 
E) 0.15 times 
A) 10.6 times 
B) 7.5 times 
C) 4.0 times 
D) 6.5 times 
E) 0.15 times

Question 14

Refer to the following selected financial information from Frankle Corp. Compute the company's working capital.

Accepted Answer

A) $536,650. 
B) $230,200. 
C) $568,200. 
D) $198,650. 
E) $231,450. 
A) $536,650. 
B) $230,200. 
C) $568,200. 
D) $198,650. 
E) $231,450.

Question 15

Describe the purpose of horizontal financial statement analysis and how it is applied.

Accepted Answer

Horizontal analysis is a tool to evaluat

Question 16

Use the balance sheets of Glover shown below to calculate the following ratios for 2017 (round to the hundredths):
(a) Current ratio.
(b) Acid-test ratio.
(c) Debt ratio.
(d) Equity ratio.

Accepted Answer

The answer of Use the balance sheets of Glover shown...

Question 17

Income statement items that are reported after the normal revenue and expenses but still part of continuing operations must be (1) _______________ and/or (2) ____________.

Accepted Answer

The answer of Income statement items that are reported after...

Question 18

Evaluation of company performance can include comparison and/or assessment of all but which of the following?

Accepted Answer

A) Past performance. 
B) Current performance. 
C) Current financial position. 
D) Future performance and risk. 
E) External user needs and demands. 
A) Past performance. 
B) Current performance. 
C) Current financial position. 
D) Future performance and risk. 
E) External user needs and demands.

Question 19

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

Accepted Answer

The answer of The comparison of a company's financial condition...

Question 20

A company's board of directors analyzes financial statements to assess future company prospects for making operating decisions.

Accepted Answer

A) True 
 B)False

Martinez Corporation reported Net Sales of $765,000 and Net Income of $142,000. The profit margin is:

Vertical analysis is a tool to evaluate individual financial statement items or groups of items in terms of a specific base amount.

A financial statement analysis report does not include:

Measures taken from a selected competitor or a group of competitors are often excellent standards of comparison for analysis.

A company's sales in Year 1 were $280,000, and its sales in Year 2 were $341,600. Using Year 1 as the base year, what is the sales trend percent for Year 2?

One of several ratios that reflects solvency includes the:

Financial reporting refers to:

The comparative balance sheet for Silverlight Co. is shown below. Express the balance sheet in common-size percentages.

A corporation reports the following year-end balance sheet data. Calculate the following ratios: (a) working capital (b) acid-test ratio (c) current ratio (d) debt ratio (e) equity ratio (f) debt-to-equity ratio

Working capital is computed as current liabilities minus current assets.

Financial statement analysis involves all of the following except:

Vertical analysis is the comparison of a company's financial condition and performance across time.

Desjardin Landscaping's income statement reports net income of $75,300, which includes deductions for interest expense of $11,500 and income taxes of $34,900. Its times interest earned is:

Refer to the following selected financial information from Frankle Corp. Compute the company's working capital.

Describe the purpose of horizontal financial statement analysis and how it is applied.

Use the balance sheets of Glover shown below to calculate the following ratios for 2017 (round to the hundredths): (a) Current ratio. (b) Acid-test ratio. (c) Debt ratio. (d) Equity ratio.

Income statement items that are reported after the normal revenue and expenses but still part of continuing operations must be (1) ___ and/or (2) .

Evaluation of company performance can include comparison and/or assessment of all but which of the following?

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

A company's board of directors analyzes financial statements to assess future company prospects for making operating decisions.

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

Martinez Corporation reported Net Sales of $765,000 and Net Income of $142,000. The profit margin is:

Vertical analysis is a tool to evaluate individual financial statement items or groups of items in terms of a specific base amount.

A financial statement analysis report does not include:

Measures taken from a selected competitor or a group of competitors are often excellent standards of comparison for analysis.

A company's sales in Year 1 were $280,000, and its sales in Year 2 were $341,600. Using Year 1 as the base year, what is the sales trend percent for Year 2?

One of several ratios that reflects solvency includes the:

Financial reporting refers to:

The comparative balance sheet for Silverlight Co. is shown below. Express the balance sheet in common-size percentages.

A corporation reports the following year-end balance sheet data. Calculate the following ratios: (a) working capital (b) acid-test ratio (c) current ratio (d) debt ratio (e) equity ratio (f) debt-to-equity ratio

Working capital is computed as current liabilities minus current assets.

Financial statement analysis involves all of the following except:

Vertical analysis is the comparison of a company's financial condition and performance across time.

Desjardin Landscaping's income statement reports net income of $75,300, which includes deductions for interest expense of $11,500 and income taxes of $34,900. Its times interest earned is:

Refer to the following selected financial information from Frankle Corp. Compute the company's working capital.

Describe the purpose of horizontal financial statement analysis and how it is applied.

Use the balance sheets of Glover shown below to calculate the following ratios for 2017 (round to the hundredths): (a) Current ratio. (b) Acid-test ratio. (c) Debt ratio. (d) Equity ratio.

Income statement items that are reported after the normal revenue and expenses but still part of continuing operations must be (1) _______________ and/or (2) ____________.

Evaluation of company performance can include comparison and/or assessment of all but which of the following?

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

A company's board of directors analyzes financial statements to assess future company prospects for making operating decisions.

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

Income statement items that are reported after the normal revenue and expenses but still part of continuing operations must be (1) ___ and/or (2) .