Question 1

Use the table for the question(s)below.
 
-Refer to the income statement above.Luther's earnings before interest,taxes,depreciation,and amortization (EBITDA)for the year ending December 31,2006 is closest to:

Accepted Answer

A) $19.7 million 
B) $37.6 million 
C) $41.2 million 
D) $44.8 million

Question 2

The management of public companies are not legally required to disclose any off balance sheet transactions.

Accepted Answer

A) True 
 B)False

Question 3

What is the role of an auditor in financial statement analysis?

Accepted Answer

The answer of What is the role of an auditor...

Question 4

Use the table for the question(s)below.
  
-Refer to the balance sheet above.Luther's quick ratio for 2005 is closest to:

Accepted Answer

A) 0.77 
B) 1.31 
C) 1.09 
D) 0.92

Question 5

Use the table for the question(s)below.
  
-Refer to the balance sheet above.What is Luther's net working capital in 2005?

Accepted Answer

A) $12 million 
B) $27 million 
C) $39 million 
D) $63.6 million

Question 6

Use the table for the question(s)below.
  
-Refer to the balance sheet above.If in 2006 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share,then Luther's market-to-book ratio would be closest to:

Accepted Answer

A) 0.39 
B) 0.76 
C) 1.29 
D) 2.57

Question 7

Use the table for the question(s)below.
AOS Industries Statement of Cash Flows for 2008 
-Consider the above statement of cash flows.If all amounts shown above are in millions of dollars,what were AOS Industries' retained earnings for 2008?

Accepted Answer

A) $1.3 million 
B) $1.7 million 
C) $2.1 million 
D) $5.4 million

Question 8

Use the table for the question(s)below.
AOS Industries Statement of Cash Flows for 2008 
-Consider the above statement of cash flows.What were AOS Industries' major means of raising money in 2008?

Accepted Answer

A) from investment activities 
B) by sale of stock 
C) from its operations 
D) by issuing debt

Question 9

Accounts payable is a

Accepted Answer

A) Long-Term Liability. 
B) Current Asset. 
C) Long-Term Asset. 
D) Current Liability.

Question 10

Which ratio would you use to measure the financial health of a firm by assessing that firm's leverage?

Accepted Answer

A) debt-equity or equity multiplier ratio 
B) market-to-book ratio 
C) market debt-equity ratio 
D) current or quick ratio

Question 11

Company A has current assets of $42 billion and current liabilities of $31 billion.Company B has current assets of $2.7 billion and current liabilities of $1.8 billion.Which of the following statements is correct,based on this information?

Accepted Answer

A) Company A is less likely than Company B to have sufficient working capital to meet its short-term needs. 
B) Company A has greater leverage than Company B. 
C) Company A has less leverage than Company B. 
D) Company A and Company B have roughly equivalent enterprise values.

Exam 2: Introduction to Financial Statement Analysis

Use the table for the question(s) below. -Refer to the income statement above.Luther's earnings before interest,taxes,depreciation,and amortization (EBITDA) for the year ending December 31,2006 is closest to:

The management of public companies are not legally required to disclose any off balance sheet transactions.

What is the role of an auditor in financial statement analysis?

Use the table for the question(s) below. -Refer to the balance sheet above.Luther's quick ratio for 2005 is closest to:

Use the table for the question(s) below. -Refer to the balance sheet above.What is Luther's net working capital in 2005?

Use the table for the question(s) below. -Refer to the balance sheet above.If in 2006 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share,then Luther's market-to-book ratio would be closest to:

Use the table for the question(s) below. AOS Industries Statement of Cash Flows for 2008 -Consider the above statement of cash flows.If all amounts shown above are in millions of dollars,what were AOS Industries' retained earnings for 2008?

Use the table for the question(s) below. AOS Industries Statement of Cash Flows for 2008 -Consider the above statement of cash flows.What were AOS Industries' major means of raising money in 2008?

Accounts payable is a

Which ratio would you use to measure the financial health of a firm by assessing that firm's leverage?

Company A has current assets of $42 billion and current liabilities of $31 billion.Company B has current assets of $2.7 billion and current liabilities of $1.8 billion.Which of the following statements is correct,based on this information?