Question 1

The DuPont Identity expresses the firm's ROE in terms of:

Accepted Answer

A) profitability,asset efficiency,and leverage. 
B) valuation,leverage,and interest coverage. 
C) profitability,margins,and valuation. 
D) equity,assets,and liabilities.

Question 2

Use the table for the question(s)below.
Consider the following income statement and other information:
 
-Luther's Operating Margin for the year ending December 31,2008 is closest to:

Accepted Answer

A) 0.5% 
B) 0.7% 
C) 5.4% 
D) 6.8%

Question 3

Use the table for the question(s)below.
Consider the following balance sheet:
  
-If in 2009 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share,then what is Luther's Enterprise Value?

Accepted Answer

A) -$63.3 million 
B) $353.1 million 
C) $389.7 million 
D) $516.9 million

Question 4

Which of the following is an example of an intangible asset?

Accepted Answer

A) Brand names and trademarks 
B) Patents 
C) Customer relationships 
D) All of the above are intangible assets.

Question 5

Use the following information for ECE incorporated:
Assets $200 million
Shareholder Equity $100 million
Sales $300 million
Net Income $15 million
Interest Expense $2 million
-If ECE's net profit margin is 8%,then ECE's return on equity (ROE)is:

Accepted Answer

A) 10% 
B) 12% 
C) 24% 
D) 30%

Question 6

Calculate Luther's return of equity (ROE),return of assets (ROA),and price-to-earnings ratio (P/E)for the year ending December 31,2008.

Accepted Answer

The answer of Calculate Luther's return of equity (ROE),return of...

Question 7

Use the table for the question(s)below.
Consider the following income statement and other information:
 
-Luther's return on assets (ROA)for the year ending December 31,2009 is closest to:

Accepted Answer

A) 1.6% 
B) 6.7% 
C) 2.3% 
D) 2.6%

Question 8

Which of the following balance sheet equations is INCORRECT?

Accepted Answer

A) Assets - Liabilities = Shareholders' Equity 
B) Assets = Liabilities + Shareholders' Equity 
C) Assets - Current Liabilities = Long Term Liabilities 
D) Assets - Current Liabilities = Long Term Liabilities + Shareholders' Equity

Question 9

Accounts payable is a:

Accepted Answer

A) long-term liability. 
B) current asset. 
C) long-term asset. 
D) current liability.

Question 10

Use the tables for the question(s)below.
Consider the following financial information:
   
-For the year ending December 31,2009 Luther's cash flow from operating activities is:

Accepted Answer

A) 9.4 
B) -18.8 
C) 47.2 
D) 40.0

Question 11

The firm's assets and liabilities at a given point in time are reported on the firm's:

Accepted Answer

A) income statement or statement of financial performance. 
B) income statement or statement of financial position. 
C) balance sheet or statement of financial performance. 
D) balance sheet or statement of financial position.

Question 12

Use the table for the question(s)below.
Consider the following balance sheet:
  
-If in 2009 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share,then using the market value of equity,the debt to equity ratio for Luther in 2009 is closest to:

Accepted Answer

A) 1.47 
B) 1.78 
C) 2.31 
D) 4.07

Question 13

Perrigo's debt to equity ratio is closest to:

Accepted Answer

A) 0.24 
B) 0.50 
C) 0.75 
D) 0.89

Question 14

If Moon Corporation has depreciation or amortization expense,which of the following is TRUE?

Accepted Answer

A) Its EBITDA /Interest Coverage ratio will be greater than its EBIT/Interest Coverage ratio. 
B) Its EBITDA /Interest Coverage ratio will be less than its EBIT/Interest Coverage ratio. 
C) Its EBITDA /Interest Coverage ratio will be equal to its EBIT/Interest Coverage ratio. 
D) Not enough information to answer the question.

Question 15

Use the table for the question(s)below.
Consider the following balance sheet:
  
-If in 2009 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 16

If on December 31,2008 Luther has 8 million shares outstanding trading at $15 per share,then what is Luther's enterprise value?

Accepted Answer

The answer of If on December 31,2008 Luther has 8...

Question 17

Details of acquisitions,spin-offs,leases,taxes,and risk management activities are given:

Accepted Answer

A) in the management discussion and analysis. 
B) in the Securities and Exchange Commission's commentary. 
C) in the auditor's report. 
D) in the notes to the financial statements.

Question 18

The firm's revenues and expenses over a period of time are reported on the firm's:

Accepted Answer

A) income statement or statement of financial performance. 
B) income statement or statement of financial position. 
C) balance sheet or statement of financial performance. 
D) balance sheet or statement of financial position.

Question 19

Use the table for the question(s)below.
Consider the following balance sheet:
  
-Luther's current ratio for 2009 is closest to:

Accepted Answer

A) 0.84 
B) 0.92 
C) 1.09 
D) 1.19

Question 20

Perrigo's market capitalization is closest to:

Accepted Answer

A) $952.16 million 
B) $3580.14 million 
C) $4168.06 million 
D) $4425.15 million

Exam 2: Introduction to Financial Statement Analysis

The DuPont Identity expresses the firm's ROE in terms of:

Use the table for the question(s) below. Consider the following income statement and other information: -Luther's Operating Margin for the year ending December 31,2008 is closest to:

Use the table for the question(s) below. Consider the following balance sheet: -If in 2009 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share,then what is Luther's Enterprise Value?

Which of the following is an example of an intangible asset?

Use the following information for ECE incorporated: Assets $200 million Shareholder Equity $100 million Sales $300 million Net Income $15 million Interest Expense $2 million -If ECE's net profit margin is 8%,then ECE's return on equity (ROE) is:

Calculate Luther's return of equity (ROE),return of assets (ROA),and price-to-earnings ratio (P/E)for the year ending December 31,2008.

Use the table for the question(s) below. Consider the following income statement and other information: -Luther's return on assets (ROA) for the year ending December 31,2009 is closest to:

Which of the following balance sheet equations is INCORRECT?

Accounts payable is a:

Use the tables for the question(s) below. Consider the following financial information: -For the year ending December 31,2009 Luther's cash flow from operating activities is: