Question 1

Match each ratio that follows to its use (items a-h) .Items may be used more than once.
-working capital

Accepted Answer

A)  assess the profitability of the assets
B)  assess how effectively assets are used
C)  indicate the ability to pay current liabilities
D)  indicate how much of the company is financed by debt and equity
E)  indicate instant debt-paying abilityF) assess the profitability of the investment by common stockholdersG) indicate future earnings prospectsH) indicate the extent to which earnings are being distributed to common stockholders I) B) and C)
J) E) and H)

Question 2

The numerator of the return on total assets is

Accepted Answer

A)   net income
B)   net income plus tax expense
C)   net income plus interest expense
D)   net income minus preferred dividendsE) C) and D)
F) B) and D)

Question 3

Comparative financial statements are designed to compare the financial statements of two or more corporations.

Accepted Answer

A) True 
 B)False

Question 4

A company reports the following:
​
  Determine the (a)accounts receivable turnover,and (b)number of days' sales in receivables.Round your answer to one
decimal place.

Accepted Answer

The answer of A company reports the following:
​
  Determine...

Question 5

What is the return on total assets for Diane Company?

Accepted Answer

A)   10.0%
B)   8.0%
C)   0.10%
D)   1.0%E) A) and C)
F) B) and C)

Question 6

Comparative information taken from the Friction Company's financial statements is shown below:
Using horizontal analysis,show the percentage change and direction (increase or decrease)from Year 1 to Year 2 with Year 1 as the base year.

Accepted Answer

The answer of Comparative information taken from the Friction Company's...

Question 7

The relationship of each asset item as a percent of total assets is an example of vertical analysis.

Accepted Answer

A) True 
 B)False

Question 8

Abigail Company reports the following:
​
  Determine the (a)return on stockholders' equity,and (b)return on common stockholders' equity.Round your answer to one decimal place.

Accepted Answer

The answer of Abigail Company reports the following:
​
  Determine...

Question 9

Which of the following ratios provides a solvency measure that shows the margin of safety of bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?

Accepted Answer

A)   ratio of fixed assets to long-term liabilities
B)   asset turnover ratio
C)   number of days' sales in receivables
D)   return on stockholders' equityE) B) and C)
F) A) and D)

Question 10

The ratio of fixed assets to long-term liabilities provides a measure of a firm's ability to pay dividends.

Accepted Answer

A) True 
 B)False

Question 11

What are the dividends per common share for Diane Company?

Accepted Answer

A)   $20.00
B)   $3.00
C)   $0.67
D)   $1.50E) A) and B)
F) A) and C)

Question 12

Match each ratio that follows to its use (items a-h) .Items may be used more than once.
-ratio of liabilities to stockholders' equity

Accepted Answer

A)  assess the profitability of the assets
B)  assess how effectively assets are used
C)  indicate the ability to pay current liabilities
D)  indicate how much of the company is financed by debt and equity
E)  indicate instant debt-paying abilityF) assess the profitability of the investment by common stockholdersG) indicate future earnings prospectsH) indicate the extent to which earnings are being distributed to common stockholders I) F) and H)
J) B) and H)

Question 13

A firm selling food should have higher inventory turnover rate than a firm selling office furniture.

Accepted Answer

A) True 
 B)False

Question 14

Unusual items affecting the current period's income statement consist of changes in accounting principles and discontinued operations.

Accepted Answer

A) True 
 B)False

Question 15

A company reports the following:
​
  Determine the (a)accounts receivable turnover,and (b)number of days' sales in receivables.Round your answer to one decimal place.

Accepted Answer

The answer of A company reports the following:
​
  Determine...

Question 16

Using the balance sheets for Kellman Company,if net income is $250,000 and interest expense is $20,000 for Year 2,and the market price of common shares is $30,what is the price-earnings ratio on common stock for Year 2? (Round intermediate calculation to two decimal places and final answers to one decimal place.)

Accepted Answer

A)   7.5
B)   13.4
C)   12.1
D)   8.5E) None of the above
F) B) and C)

Question 17

Brock Company's financial information is listed below.Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Assets
 Liabilities and Stockholders' Equity
​
 Income Statement
 ​
 What is the current ratio?

Accepted Answer

A)   1.42
B)   1.17
C)   1.58
D)   0.67E) All of the above
F) A) and B)

Question 18

Based on the data for Privett Company,what is the quick ratio,rounded to one decimal point?

Accepted Answer

A)   1.7
B)   2.9
C)   1.1
D)   1.0E) B) and D)
F) A) and B)

Question 19

On a common-sized income statement,all items are stated as a percent of total assets or equities at year-end.

Accepted Answer

A) True 
 B)False

Question 20

The report on internal control required by the Sarbanes-Oxley Act of 2002 may be prepared by either management or the company's auditors.

Accepted Answer

A) True 
 B)False

Exam 14: Financial Statement Analysis

What is the return on total assets for Diane Company?

Correct Answer
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Correct Answer
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Match each ratio that follows to its use (items a-h) .Items may be used more than once. -working capital

Correct Answer
verified

The ratio of fixed assets to long-term liabilities provides a measure of a firm's ability to pay dividends.

Correct Answer
verified

The report on internal control required by the Sarbanes-Oxley Act of 2002 may be prepared by either management or the company's auditors.

Correct Answer
verified

Unusual items affecting the current period's income statement consist of changes in accounting principles and discontinued operations.

Correct Answer
verified

On a common-sized income statement,all items are stated as a percent of total assets or equities at year-end.

Correct Answer
verified

A company reports the following: Determine the (a)accounts receivable turnover,and (b)number of days' sales in receivables.Round your answer to one decimal place.

Correct Answer
verified

A firm selling food should have higher inventory turnover rate than a firm selling office furniture.

Correct Answer
verified

Abigail Company reports the following: Determine the (a)return on stockholders' equity,and (b)return on common stockholders' equity.Round your answer to one decimal place.

Correct Answer
verified

What are the dividends per common share for Diane Company?

Correct Answer
verified

Match each ratio that follows to its use (items a-h) .Items may be used more than once. -ratio of liabilities to stockholders' equity

Correct Answer
verified

A company reports the following: Determine the (a)accounts receivable turnover,and (b)number of days' sales in receivables.Round your answer to one decimal place.

Correct Answer
verified

Comparative information taken from the Friction Company's financial statements is shown below: Using horizontal analysis,show the percentage change and direction (increase or decrease)from Year 1 to Year 2 with Year 1 as the base year.

Correct Answer
verified

Comparative financial statements are designed to compare the financial statements of two or more corporations.

Correct Answer
verified

Which of the following ratios provides a solvency measure that shows the margin of safety of bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?

Correct Answer
verified

The numerator of the return on total assets is

Correct Answer
verified

The relationship of each asset item as a percent of total assets is an example of vertical analysis.

Correct Answer
verified

Based on the data for Privett Company,what is the quick ratio,rounded to one decimal point?

Correct Answer
verified

Brock Company's financial information is listed below.Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Assets Liabilities and Stockholders' Equity Income Statement What is the current ratio?

Correct Answer
verified

Exam 14: Financial Statement Analysis

What is the return on total assets for Diane Company?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Match each ratio that follows to its use (items a-h) .Items may be used more than once. -working capital

Correct AnswerverifiedShow Answer

The ratio of fixed assets to long-term liabilities provides a measure of a firm's ability to pay dividends.

Correct AnswerverifiedShow Answer

The report on internal control required by the Sarbanes-Oxley Act of 2002 may be prepared by either management or the company's auditors.

Correct AnswerverifiedShow Answer

Unusual items affecting the current period's income statement consist of changes in accounting principles and discontinued operations.

Correct AnswerverifiedShow Answer

On a common-sized income statement,all items are stated as a percent of total assets or equities at year-end.

Correct AnswerverifiedShow Answer

A company reports the following: ​ Determine the (a)accounts receivable turnover,and (b)number of days' sales in receivables.Round your answer to one decimal place.

Correct AnswerverifiedShow Answer

A firm selling food should have higher inventory turnover rate than a firm selling office furniture.

Correct AnswerverifiedShow Answer

Abigail Company reports the following: ​ Determine the (a)return on stockholders' equity,and (b)return on common stockholders' equity.Round your answer to one decimal place.

Correct AnswerverifiedShow Answer

What are the dividends per common share for Diane Company?

Correct AnswerverifiedShow Answer

Match each ratio that follows to its use (items a-h) .Items may be used more than once. -ratio of liabilities to stockholders' equity

Correct AnswerverifiedShow Answer

A company reports the following: ​ Determine the (a)accounts receivable turnover,and (b)number of days' sales in receivables.Round your answer to one decimal place.

Correct AnswerverifiedShow Answer

Comparative information taken from the Friction Company's financial statements is shown below: Using horizontal analysis,show the percentage change and direction (increase or decrease)from Year 1 to Year 2 with Year 1 as the base year.

Correct AnswerverifiedShow Answer

Comparative financial statements are designed to compare the financial statements of two or more corporations.

Correct AnswerverifiedShow Answer

Which of the following ratios provides a solvency measure that shows the margin of safety of bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?

Correct AnswerverifiedShow Answer

The numerator of the return on total assets is

Correct AnswerverifiedShow Answer

The relationship of each asset item as a percent of total assets is an example of vertical analysis.

Correct AnswerverifiedShow Answer

Based on the data for Privett Company,what is the quick ratio,rounded to one decimal point?

Correct AnswerverifiedShow Answer

Brock Company's financial information is listed below.Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Assets Liabilities and Stockholders' Equity ​ Income Statement ​ What is the current ratio?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

A company reports the following: Determine the (a)accounts receivable turnover,and (b)number of days' sales in receivables.Round your answer to one decimal place.

Correct Answer
verified

Correct Answer
verified

Abigail Company reports the following: Determine the (a)return on stockholders' equity,and (b)return on common stockholders' equity.Round your answer to one decimal place.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A company reports the following: Determine the (a)accounts receivable turnover,and (b)number of days' sales in receivables.Round your answer to one decimal place.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Brock Company's financial information is listed below.Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Assets Liabilities and Stockholders' Equity Income Statement What is the current ratio?

Correct Answer
verified