Question 1

Indicate which of the following ratios are being used in each situation.Some ratios may be used more than once.Others may not be used at all.
a.solvency
b.profitability
c.market indicator
d.liquidity

Accepted Answer

The answer of Indicate which of the following ratios are...

Question 2

The debt-to-equity ratio is a measure of a company's solvency.

Accepted Answer

A) True 
 B)False

Question 3

Markot Corporation purchased $400,000 of securities and classified them as available-for-sale.The market value of the securities went down to $375,000.Markot Corporation should ________.

Accepted Answer

A) show these securities on its balance sheet at their market value 
B) report a holding gain on its income statement 
C) report a holding loss on its income statement 
D) report an unrealized loss on its income statement

Question 4

Wilson Wong received an inheritance from his grandfather.Wilson wants to invest the money in stocks.He is interested in long-term investments in companies with solid financial performance.Explain to Wilson the four major categories of financial ratios and how they are used to help investors analyze the performance of companies.

Accepted Answer

The answer of Wilson Wong received an inheritance from his...

Question 5

Ratios used to determine whether or not a company can pay its bills on time are ________.

Accepted Answer

A) liquidity ratios 
B) solvency ratios 
C) profitability ratios 
D) market indicators

Question 6

Which financial statement(s)do you need to calculate the cash from operations to current liabilities ratio?

Accepted Answer

A) only the income statement 
B) both the statement of cash flows and the balance sheet 
C) both the income statement and the balance sheet 
D) both the statement of cash flows and the income statement

Question 7

The following information is from Acme's annual report for the years ended Dec. 31:

-Refer to the Acme annual report above.Calculate return on equity for 2012.

Accepted Answer

A) 39.3% 
B) 49.0% 
C) 32.7% 
D) The answer cannot be determined from the information given.

Question 8

Comprehensive income is ________.

Accepted Answer

A) income earned by a company over an entire fiscal year 
B) included in the calculation of net income 
C) not included in the calculation of net income 
D) income earned by a company including all of its business segments

Question 9

The return on equity ratio is a ________ ratio.

Accepted Answer

A) liquidity 
B) solvency 
C) profitability 
D) market indicator

Question 10

One way to diversify is to ________.

Accepted Answer

A) invest only in stocks 
B) invest only in bonds 
C) invest in both stocks and bonds,but always from companies in the same industry,so that you become an industry expert 
D) invest in both stocks and bonds from companies in different industries

Question 11

Which financial statement(s)do you need to calculate the accounts receivable turnover ratio?

Accepted Answer

A) only the income statement 
B) only the balance sheet 
C) both the income statement and the balance sheet 
D) both the statement of cash flows and the income statement

Question 12

The following information has been adapted from the 2004 and 2005 annual reports of Halliburton Company's worldwide operations, available online at
http://ir.halliburton.com/phoenix.zhtml?c=67605&p=irol-irhome
HALLIBURTON COMPANY	
Consolidated Statements of Operations

HALLIBURTON COMPANY	
Condensed Consolidated Statements of Cash Flows

HALLIBURTON COMPANY	
Consolidated Balance Sheets

-Divide the class into teams of three or four people.Each team member should work the following problem separately outside of class.Then give the students time in class to compare answers with their teammates and put together a final,correct copy of the problem.Each team should turn in only one copy of the problem for grading.All team members will receive the same grade.
Use the adapted financial statements from Halliburton Company to answer the following questions:
  10.Use the liquidity ratios you have just calculated to discuss Halliburton Company's liquidity.
  14.Use the solvency ratio you have just calculated to discuss Halliburton Company's solvency.

Accepted Answer

The answer of The following information has been adapted from...

Question 13

The following information is from Acme's annual report for the years ended Dec. 31:

-Refer to the Acme annual report above.Calculate the current ratio for 2010.

Accepted Answer

A) 0)3 
B) 0)9 
C) 1)7 
D) 2)9

Question 14

Owning only stocks is riskier than owning both stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 15

The debt-to-equity ratio is a ________ ratio.

Accepted Answer

A) liquidity 
B) solvency 
C) profitability 
D) market indicator

Question 16

Discontinued operations need to be treated separately from regular business operations on the ________.

Accepted Answer

A) balance sheet 
B) income statement 
C) statement of cash flows 
D) statement of financial position

Question 17

In horizontal analysis,each item on a balance sheet is expressed as a percentage of total assets.

Accepted Answer

A) True 
 B)False

Question 18

Comprehensive income is the total of all items that affect shareholders' equity except transactions with the owners.

Accepted Answer

A) True 
 B)False

Question 19

Which financial statement(s)do you need to calculate the debt-to-equity ratio?

Accepted Answer

A) only the income statement 
B) only the balance sheet 
C) both the income statement and the balance sheet 
D) both the statement of cash flows and the income statement

Question 20

The following information is provided from Ace Electronics' annual report for the years ended December 31:

-Refer to the Ace Electronics annual report above.Using horizontal analysis with 2010 as the base year,$\bold{2012}$ Gross profit would be represented as ________.

Accepted Answer

A) 88% 
B) 12% 
C) (3%) 
D) 13%

Exam 10: Using Financial Statement Analysis to Evaluate Firm Performance

Indicate which of the following ratios are being used in each situation.Some ratios may be used more than once.Others may not be used at all. a.solvency b.profitability c.market indicator d.liquidity

The debt-to-equity ratio is a measure of a company's solvency.

Markot Corporation purchased $400,000 of securities and classified them as available-for-sale.The market value of the securities went down to $375,000.Markot Corporation should ________.

Ratios used to determine whether or not a company can pay its bills on time are ________.

Which financial statement(s) do you need to calculate the cash from operations to current liabilities ratio?

The following information is from Acme's annual report for the years ended Dec. 31: -Refer to the Acme annual report above.Calculate return on equity for 2012.

Comprehensive income is ________.

The return on equity ratio is a ________ ratio.

One way to diversify is to ________.

Which financial statement(s) do you need to calculate the accounts receivable turnover ratio?

The following information is from Acme's annual report for the years ended Dec. 31: -Refer to the Acme annual report above.Calculate the current ratio for 2010.

Owning only stocks is riskier than owning both stocks and bonds.

The debt-to-equity ratio is a ________ ratio.

Discontinued operations need to be treated separately from regular business operations on the ________.

In horizontal analysis,each item on a balance sheet is expressed as a percentage of total assets.

Comprehensive income is the total of all items that affect shareholders' equity except transactions with the owners.

Which financial statement(s) do you need to calculate the debt-to-equity ratio?

Exam 10: Using Financial Statement Analysis to Evaluate Firm Performance

Indicate which of the following ratios are being used in each situation.Some ratios may be used more than once.Others may not be used at all. a.solvency b.profitability c.market indicator d.liquidity

The debt-to-equity ratio is a measure of a company's solvency.

Markot Corporation purchased $400,000 of securities and classified them as available-for-sale.The market value of the securities went down to $375,000.Markot Corporation should ________.

Ratios used to determine whether or not a company can pay its bills on time are ________.

Which financial statement(s) do you need to calculate the cash from operations to current liabilities ratio?

The following information is from Acme's annual report for the years ended Dec. 31: -Refer to the Acme annual report above.Calculate return on equity for 2012.

Comprehensive income is ________.

The return on equity ratio is a ________ ratio.

One way to diversify is to ________.

Which financial statement(s) do you need to calculate the accounts receivable turnover ratio?

The following information is from Acme's annual report for the years ended Dec. 31: -Refer to the Acme annual report above.Calculate the current ratio for 2010.

Owning only stocks is riskier than owning both stocks and bonds.

The debt-to-equity ratio is a ________ ratio.

Discontinued operations need to be treated separately from regular business operations on the ________.

In horizontal analysis,each item on a balance sheet is expressed as a percentage of total assets.

Comprehensive income is the total of all items that affect shareholders' equity except transactions with the owners.

Which financial statement(s) do you need to calculate the debt-to-equity ratio?

The following information is provided from Ace Electronics' annual report for the years ended December 31: -Refer to the Ace Electronics annual report above.Using horizontal analysis with 2010 as the base year, 2012\bold{2012}2012 Gross profit would be represented as ________.