Question 1

A company had a profit margin of 12%.If net income equaled $450,000 and average total assets equaled $600,500,how much were sales?

Accepted Answer

A) $1,050,500 
B) $126,060 
C) $72,060 
D) $54,000 
E) $3,750,000

Question 2

Extraordinary items are reported in the operating section of the income statement.

Accepted Answer

A) True 
 B)False

Question 3

The ability to generate future revenues and meet long-term obligations is referred to as:

Accepted Answer

A) Liquidity and efficiency. 
B) Solvency. 
C) Profitability. 
D) Market prospects. 
E) Creditworthiness.

Question 4

A company has total assets of $5,600,482,common stock of $2,111,111,and retained earnings of $1,058,473.What is the company's equity ratio?

Accepted Answer

A) 43.41% 
B) 65.00% 
C) 41.57% 
D) 56.59% 
E) 54.22%

Question 5

Three of the most common tools of financial analysis are (1) _________________________, (2) ___________________________ and (3) ______________________________.

Accepted Answer

The answer of Three of the most common tools of...

Question 6

The return on common stockholders' equity measures a company's success in reaching the goal of earning net income for its owners.

Accepted Answer

A) True 
 B)False

Question 7

A corporation had cash of $14,000 and total assets of $178,300.On a common-size balance sheet,cash would be reported as 7.85%.

Accepted Answer

A) True 
 B)False

Question 8

The comparison of a company's financial condition and performance across time is known as:

Accepted Answer

A) Horizontal analysis. 
B) Vertical analysis. 
C) Political analysis. 
D) Financial reporting. 
E) Investment analysis.

Question 9

The following current year information is available from a manufacturing company:
  Calculate the company's accounts receivable turnover and its days' sales uncollected.

Accepted Answer

The answer of The following current year information is available...

Question 10

Financial statement analysis can be used for personal investment decisions.

Accepted Answer

A) True 
 B)False

Question 11

A company had a return on common stockholders' equity of 22%.Net income equaled $600,000 and average common stockholders' equity equaled $2,500,000.Compute the amount of the preferred dividends declared.

Accepted Answer

A) $50,000 
B) $550,000 
C) $132,000 
D) $10,763,636 
E) $10,000

Question 12

Express the following income statement information in common-size percents (round to nearest whole percent).Comment on the results.

Accepted Answer

The answer of Express the following income statement information in...

Question 13

A company has total assets of $5,600,482,common stock of $2,111,111,and retained earnings of $1,058,473.What is the company's debt ratio?

Accepted Answer

A) 43.41% 
B) 65.00% 
C) 41.57% 
D) 50.00% 
E) 42.81%

Question 14

Explain the purpose of financial statement analysis for both external and internal users.

Accepted Answer

The answer of Explain the purpose of financial statement analysis...

Question 15

A financial statement analysis report should include a brief table of contents to help users focus on those areas most relevant to their decisions.

Accepted Answer

A) True 
 B)False

Question 16

The four building blocks of financial analysis are (1) ____________________, (2) __________________________, (3) ____________________ and (4) _____________________.

Accepted Answer

The answer of The four building blocks of financial analysis...

Question 17

Oakley Corporation has the following comparative income statements.Which of the following statements is false with regard to this comparative data?

Accepted Answer

A) The common-size sales percent for 2014 equals 100%. 
B) The common-size net income percent for 2013 equals 28.2%. 
C) The common-size gross profit percent for 2014 equals (3.87)%. 
D) The common-size cost of goods sold for 2013 equals 52.4%. 
E) The common-size operating expenses for 2014 equals 21%.

Question 18

Financial reporting includes not only general purpose financial statements,but also information from SEC filings,press releases,shareholders' meetings,forecasts,management letters,auditor's reports,and Webcasts.

Accepted Answer

A) True 
 B)False

Question 19

A company's balance sheet and income statement accounts follow:   
-What is the company's profit margin ratio for 2014?

Accepted Answer

A) 65% 
B) 12% 
C) 3.7% 
D) 5.9% 
E) 5.0%

Question 20

Describe ratio analysis including its purpose,application,and interpretation.

Accepted Answer

The answer of Describe ratio analysis including its purpose,application,and interpretation....

Exam 13: Analyzing and Interpreting Financial Statements

A company had a profit margin of 12%.If net income equaled $450,000 and average total assets equaled $600,500,how much were sales?

Extraordinary items are reported in the operating section of the income statement.

The ability to generate future revenues and meet long-term obligations is referred to as:

A company has total assets of $5,600,482,common stock of $2,111,111,and retained earnings of $1,058,473.What is the company's equity ratio?

Three of the most common tools of financial analysis are (1) ___________, (2) _ and (3) __________________.

The return on common stockholders' equity measures a company's success in reaching the goal of earning net income for its owners.

A corporation had cash of $14,000 and total assets of $178,300.On a common-size balance sheet,cash would be reported as 7.85%.

The comparison of a company's financial condition and performance across time is known as:

The following current year information is available from a manufacturing company: Calculate the company's accounts receivable turnover and its days' sales uncollected.

Financial statement analysis can be used for personal investment decisions.

A company had a return on common stockholders' equity of 22%.Net income equaled $600,000 and average common stockholders' equity equaled $2,500,000.Compute the amount of the preferred dividends declared.

Express the following income statement information in common-size percents (round to nearest whole percent).Comment on the results.

A company has total assets of $5,600,482,common stock of $2,111,111,and retained earnings of $1,058,473.What is the company's debt ratio?

Explain the purpose of financial statement analysis for both external and internal users.

A financial statement analysis report should include a brief table of contents to help users focus on those areas most relevant to their decisions.

The four building blocks of financial analysis are (1) , (2) , (3) and (4) ___.

Oakley Corporation has the following comparative income statements.Which of the following statements is false with regard to this comparative data?

Financial reporting includes not only general purpose financial statements,but also information from SEC filings,press releases,shareholders' meetings,forecasts,management letters,auditor's reports,and Webcasts.

A company's balance sheet and income statement accounts follow: -What is the company's profit margin ratio for 2014?

Describe ratio analysis including its purpose,application,and interpretation.