Question 1

Describe what is meant by income from continuing operations?

Accepted Answer

The answer of Describe what is meant by income from...

Question 2

Which of the following would not inhibit new entrants into a market?

Accepted Answer

A)  Existing technological expertise. 
B)  Large required capital investment. 
C)  Lack of rivalry among current participants. 
D)  Existing patented technology.

Question 3

The fourth step in financial statement analysis is using the financial statements to analyze the current ____________________ and ____________________ of the firm.

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The answer of The fourth step in financial statement analysis...

Question 4

The ______________________________ sets forth the sequence of activities involved in the creation,manufacture and distribution of its products and services.

Accepted Answer

The answer of The ______________________________ sets forth the sequence of...

Question 5

An example of an intangible asset is

Accepted Answer

A)  A patent 
B)  Land 
C)  Investment in another company 
D)  Raw material inventory

Question 6

The second step in financial statement analysis is to identify the company strategy.Which of the following is a question an analyst should ask when performing a strategy analysis?

Accepted Answer

A)  Are industry sales growing rapidly or slowly? 
B)  Do earnings include revenues that appear mismatched with the business model employed by the firm? 
C)  Does the industry include a large number of firms selling similar products? 
D)  What is the company's degree of geographical diversification?

Question 7

When identifying the strategies that a particular firm pursues to gain a competitive advantage it is important to determine if its products are designed to meet the needs of a specific market segment or are they intended for a _____________________________________________.

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The answer of When identifying the strategies that a particular...

Question 8

The main components that make up the stockholder's equity section of the balance sheet are_________________ and _______________________

Accepted Answer

The answer of The main components that make up the...

Question 9

Prepare an analysis of the grocery industry using Porter's Five Forces framework.For each component force provide support for your conclusion.In addition,at the completion of your analysis provide a conclusion,along with support,of whether you expect the grocery industry to report high or low profitability in the near future.

Accepted Answer

The answer of Prepare an analysis of the grocery industry...

Question 10

How easily can new firms enter a market is a question one might ask when assessing _____________________________________________.

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The answer of How easily can new firms enter a...

Question 11

When assessing buyer power using Porter's five forces,which of the following is not consistent with low buyer power?

Accepted Answer

A)  Brand loyalty 
B)  Control of distribution channel 
C)  Large number of suppliers 
D)  Low price

Question 12

Basic EPS is calculated as net income minus _____________________________________________ divided by the weighted average number of shares outstanding.

Accepted Answer

The answer of Basic EPS is calculated as net income...

Question 13

The five economic attributes that are normally studied are demand,supply,manufacturing,____________________,and investing and financing.

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The answer of The five economic attributes that are normally...

Question 14

Depreciation is a ___________________ added back to net income when preparing the operating activities section of the Statement of Cash Flows.

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The answer of Depreciation is a ___________________ added back to...

Question 15

The two categories of shareholders' equity usually found on the balance sheet of a corporation are

Accepted Answer

A)  Contributed capital and property, plant, and equipment. 
B)  Retained earnings and notes payable. 
C)  Common stock and retained earnings. 
D)  Contributed capital and equity securities.

Question 16

Which of the following assets would appear on the balance sheet at an amount greatly below its fair market value?

Accepted Answer

A)  Inventory 
B)  Marketable securities 
C)  Equipment 
D)  Brand name

Question 17

The threat of new entrants is measured by whether there are entry barriers,such as capital investment,________________________________________,patents,or regulation that inhibit new entrants.

Accepted Answer

The answer of The threat of new entrants is measured...

Question 18

Extraordinary gains and losses arise from events that have all the following characteristics except:

Accepted Answer

A)  They are unusual given the nature of the firm's activity. 
B)  They are nonrecurring. 
C)  They are material in amount. 
D)  They result from terminated involvement in a line of business.

Question 19

On a common size basis,which of the following assets is normally largest for an electric utility?

Accepted Answer

A)  Accounts receivable 
B)  Inventory 
C)  Property, Plant and Equipment 
D)  Cash and Marketable Securities

Question 20

On a common size basis,which of the following assets is normally largest for a commercial bank?

Accepted Answer

A)  Accounts and Notes Receivable 
B)  Inventory 
C)  Property, Plant and Equipment 
D)  Cash and Marketable Securities

Exam 1: Overview of Financial Reporting, financial Statement Analysis, and Valuation