Question 1

Inventory days will be higher in the coal industry than in a market garden.

Accepted Answer

A) True 
 B)False  True

Question 2

Return on assets compares to:

Accepted Answer

A) Profit before interest & tax to total assets 
B) Profit before interest & tax to net assets 
C) Profit after tax to total assets 
D) Profit after tax to net assets 
A) Profit before interest & tax to total assets 
B) Profit before interest & tax to net assets 
C) Profit after tax to total assets 
D) Profit after tax to net assets A

Question 3

The Price Earnings ratio represents the number of years earnings that it is necessary to have to recover the price paid for the share.

Accepted Answer

A) True 
 B)False  True

Question 4

In 200X,the profit before tax = €95,interest charged = €20,Capital employed = €1500,total current liabilities = €250 & Long term debt = €110.Calculate the return on equity.

Accepted Answer

A) 6.8% 
B) 7.1% 
C) 7.7% 
D) 9.2% 
A) 6.8% 
B) 7.1% 
C) 7.7% 
D) 9.2%

Question 5

The ratio 'return on total assets' is more influenced by financial structure than is 'return on capital employed'.

Accepted Answer

A) True 
 B)False

Question 6

Under IAS accounting where are you most likely to find changes in inventory levels and purchases?

Accepted Answer

A) In the notes to the accounts 
B) On the face of the balance sheet 
C) On the face of the profit & loss 
D) The value added statement 
A) In the notes to the accounts 
B) On the face of the balance sheet 
C) On the face of the profit & loss 
D) The value added statement

Question 7

What creditor turnover in days is represented by a credit purchases / trade creditors ratio of 6.08?

Accepted Answer

A) 63 days 
B) 62 days 
C) 61 days 
D) 60 days 
A) 63 days 
B) 62 days 
C) 61 days 
D) 60 days

Question 8

Vertical analysis is also known as trend analysis.

Accepted Answer

A) True 
 B)False

Question 9

The ratio sales / capital employed is often known as the 'asset turnover'.

Accepted Answer

A) True 
 B)False

Question 10

In 200X,the profit before tax = €95,interest charged = €15,Capital employed = €1350,total current liabilities = €300 & Long term debt = €120.Calculate the return on capital employed.

Accepted Answer

A) 7.5% 
B) 7.7% 
C) 8.1% 
D) 10.5% 
A) 7.5% 
B) 7.7% 
C) 8.1% 
D) 10.5%

Exam 12: Basics of Interpretation of Financial Statements

Inventory days will be higher in the coal industry than in a market garden.

Return on assets compares to:

The Price Earnings ratio represents the number of years earnings that it is necessary to have to recover the price paid for the share.

In 200X,the profit before tax = €95,interest charged = €20,Capital employed = €1500,total current liabilities = €250 & Long term debt = €110.Calculate the return on equity.

The ratio 'return on total assets' is more influenced by financial structure than is 'return on capital employed'.

Under IAS accounting where are you most likely to find changes in inventory levels and purchases?

What creditor turnover in days is represented by a credit purchases / trade creditors ratio of 6.08?

Vertical analysis is also known as trend analysis.

The ratio sales / capital employed is often known as the 'asset turnover'.

In 200X,the profit before tax = €95,interest charged = €15,Capital employed = €1350,total current liabilities = €300 & Long term debt = €120.Calculate the return on capital employed.

Basics of Financial Reporting

International Accounting Differences

The Process of Harmonization

Economic Valuation Concepts

Current Entry Value

Current Exit Value and Mixed Values

Current Purchasing Power Accounting

Fair Values

Accounting Theory and Conceptual Frameworks

Structure of Published Financial Statements

Corporate Governance, corporate Social Responsibility and Ethics

Fixed Non-Currenttangible Assets

Intangible Assets

Impairment and Disposal of Assets

Leases

Inventories and Construction Contracts

Accounting for Financial Instruments

Revenue

Provisions, contingent Liabilities and Contingent Assets

Income Taxes

Employee Benefits

Changing Prices and Hyperinflationary Economies

Statements of Cash Flows

Disclosure Issues

Business Combinations

Consolidated Financial Statements

Alternative Concepts on Consolidation and Business Combinations

Accounting for Associates, joint Arrangements and Related Party Disclosures

Foreign Currency Translation

Interpretation of Financial Statements

Techniques of Financial Analysis

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