How many of these ratios measure the adequacy of profits? F1F1F1S1F1F1F10F1F1F1S1F1F1F10F1F1F1S1F1F1F10Profit before interest and finance costs/ finance costs F1F1F1S1F1F1F10F1F1F1S1F1F1F10F1F1F1S1F1F1F10Profit compared to total assets F1F1F1S1F1F1F10F1F1F1S1F1F1F10Profit compared to sales F1F1F1S1F1F1F10F1F1F1S1F1F1F10F1F1F1S1F1F1F10Profit compared to equity

A) 1 B) 2 C) 3 D) 4 A) 1 B) 2 C) 3 D) 4

To be useful for decision making, absolute dollar amounts in financial statements need to be compared with other information. How many of these are possible comparisons? F1F1F1S1F1F1F10F1F1F1S1F1F1F10F1F1F1S1F1F1F10Prior year results F1F1F1S1F1F1F10F1F1F1S1F1F1F10F1F1F1S1F1F1F10Current year sales, total assets etc. F1F1F1S1F1F1F10F1F1F1S1F1F1F10F1F1F1S1F1F1F10Results of similar businesses or industry averages

A) 0 B) 1 C) 2 D) 3 A) 0 B) 1 C) 2 D) 3

How many of these ratios measure the relationship between debt and equity? F1F1F1S1F1F1F10F1F1F1S1F1F1F10F1F1F1S1F1F1F10The debt ratio F1F1F1S1F1F1F10F1F1F1S1F1F1F10F1F1F1S1F1F1F10The equity (proprietorship) ratio F1F1F1S1F1F1F10F1F1F1S1F1F1F10F1F1F1S1F1F1F10The leverage ratio (total assets/total equity) F1F1F1S1F1F1F10F1F1F1S1F1F1F10F1F1F1S1F1F1F10The current ratio

A) 1 B) 2 C) 3 D) 4 A) 1 B) 2 C) 3 D) 4

Exam 25: Analysis and Interpretation of Financial Statements

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How many of these ratios measure the adequacy of profits? Profit before interest and finance costs/ finance costs Profit compared to total assets Profit compared to sales Profit compared to equity

(Multiple Choice)

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Question 41

In a trend analysis of K Company, which of these changes appears to be the most significant in requiring further investigation?

(Multiple Choice)

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Question 42

All of these ratios are indicators of profitability except:

(Multiple Choice)

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Question 43

If an entity is able to earn more on borrowings than the cost of those borrowings the return on equity will:

(Multiple Choice)

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Question 44

How many of these are limitations of financial analysis? I The past is an imperfect guide to the future II The effect of inflation is not considered III Undisclosed changes in accounting policies IV Inconsistent classification

(Multiple Choice)

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Question 45

(Multiple Choice)

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Question 46

Financial ratios are used for all of the following purposes except:

(Multiple Choice)

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Question 47

Protan Ltd has the following summary balance sheet at year-end. Current assets $ 700 000 Long-term assets 1 000 000 Current liabilities 100 000 Long-term liabilities 300 000 Share capital 600 000 Retained earnings 700 000 The debt ratio at year-end is:

(Multiple Choice)

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Question 48

To be useful for decision making, absolute dollar amounts in financial statements need to be compared with other information. How many of these are possible comparisons? Prior year results Current year sales, total assets etc. Results of similar businesses or industry averages

(Multiple Choice)

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Question 49

All of these ratios are measures of aspects of a firm's profitability, except:

(Multiple Choice)

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Question 50

In relation to the price-earnings ratio (P/E ratio), which statement is incorrect?

(Multiple Choice)

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Question 51

How many of these ratios measure the relationship between debt and equity? The debt ratio The equity (proprietorship) ratio The leverage ratio (total assets/total equity) The current ratio

(Multiple Choice)

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Question 52

The quick ratio (acid test ratio) reflects:

(Multiple Choice)

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Question 53

All of these are limitations of financial ratio analysis except:

(Multiple Choice)

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Question 54

Which statement concerning earnings per share is incorrect?

(Multiple Choice)

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Question 55

The debt ratio measures:

(Multiple Choice)

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Question 56

All of these are possible explanations of why profitability is inadequate except:

(Multiple Choice)

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Question 57

The ratio which would be most helpful to an investor who is investing in ordinary shares primarily for dividends rather than for appreciation in market price, is:

(Multiple Choice)

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Question 58

Financial stability refers to the ability of an entity to:

(Multiple Choice)

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Question 59

(Multiple Choice)

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Question 60

Showing 41 - 60 of 64

Exam 25: Analysis and Interpretation of Financial Statements

How many of these ratios measure the adequacy of profits? Profit before interest and finance costs/ finance costs Profit compared to total assets Profit compared to sales Profit compared to equity

In a trend analysis of K Company, which of these changes appears to be the most significant in requiring further investigation?

All of these ratios are indicators of profitability except:

If an entity is able to earn more on borrowings than the cost of those borrowings the return on equity will:

How many of these are limitations of financial analysis? I The past is an imperfect guide to the future II The effect of inflation is not considered III Undisclosed changes in accounting policies IV Inconsistent classification

Financial ratios are used for all of the following purposes except:

Protan Ltd has the following summary balance sheet at year-end. Current assets $ 700 000 Long-term assets 1 000 000 Current liabilities 100 000 Long-term liabilities 300 000 Share capital 600 000 Retained earnings 700 000 The debt ratio at year-end is:

All of these ratios are measures of aspects of a firm's profitability, except:

In relation to the price-earnings ratio (P/E ratio), which statement is incorrect?

How many of these ratios measure the relationship between debt and equity? The debt ratio The equity (proprietorship) ratio The leverage ratio (total assets/total equity) The current ratio

The quick ratio (acid test ratio) reflects:

All of these are limitations of financial ratio analysis except:

Which statement concerning earnings per share is incorrect?

The debt ratio measures:

All of these are possible explanations of why profitability is inadequate except:

The ratio which would be most helpful to an investor who is investing in ordinary shares primarily for dividends rather than for appreciation in market price, is:

Financial stability refers to the ability of an entity to:

Decision Making and the Role of Accounting

Financial Statements for Decision Making

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Adjusting the Accounts and Preparing Financial Statements

Completing the Accounting Cycle Closing and Reversing Entries

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