Question 1

Refer to the following selected financial information from Marston Company. Compute the company's days' sales uncollected for Year 2. (Use 365 days a year.)    Year 2  Year 1  Accounts receivable, net 86,50082,750 Net sales 723,000693,000\begin{array}{|l|r|r|}\hline & 	ext { Year 2 } &{	ext { Year 1 }} \\hline 	ext { Accounts receivable, net } & 86,500 & 82,750 \\hline 	ext { Net sales } & 723,000 & 693,000 \\hline\end{array} Accounts receivable, net  Net sales ​ Year 2 86,500723,000​ Year 1 82,750693,000​​

Accepted Answer

A)  42.7.
B)  46.2.
C)  85.4.
D)  43.9.
E)  43.7. F) None of the above
G) A) and B)

Question 2

Ratios must refer to economically important relationships, such as a sale price compared to its cost.

Accepted Answer

A) True 
 B)False

Question 3

Profitability is the ability to generate future revenues and meet long-term obligations.

Accepted Answer

A) True 
 B)False

Question 4

The percent change of a comparative financial statement item is computed by subtracting the base period amount from the analysis period amount, dividing the result by the base period amount and multiplying that result by 100.

Accepted Answer

A) True 
 B)False

Question 5

Financial statement analysis applies analytical tools to financial statements and related data for making business decisions.

Accepted Answer

A) True 
 B)False

Question 6

To compute trend percentages the analyst should:

Accepted Answer

A)  Compare amounts to a competitor.
B)  Select a base period, assign each item in the base period statement a weight of 100%, and then express financial numbers from other periods as a percent of their base period number.
C)  Subtract the analysis period number from the base period number.
D)  Subtract the base period amount from the analysis period amount, divide the result by the analysis period amount, then multiply that amount by 100.
E)  Compare amounts across industries using Dun and Bradstreet.F) C) and D)
G) B) and E)

Question 7

The market price of Horokhiv Corporation's common stock at the start of 2016 was $47.50 and it declared and paid cash dividends of $3.28 per share. The Dividend yield ratio is:

Accepted Answer

A)  144.8%.
B)  6.5%.
C)  6.9%.
D)  14.5%.
E)  7.4%.F) C) and E)
G) C) and D)

Question 8

Standards for comparison are not generally necessary when making judgments about a company's performance.

Accepted Answer

A) True 
 B)False

Question 9

Horizontal analysis is used to reveal changes in the relative importance of each financial statement item.

Accepted Answer

A) True 
 B)False

Question 10

Net sales divided by Average accounts receivable, net is the:

Accepted Answer

A)  Profit margin.
B)  Average accounts receivable ratio.
C)  Current ratio.
D)  Days' sales uncollected.
E)  Accounts receivable turnover ratio.F) B) and C)
G) B) and E)

Question 11

A financial statement analysis report does not include:

Accepted Answer

A)  Evidential matter.
B)  Qualitative and quantitative key factors.
C)  An analysis overview.
D)  Inferences such as forecasts.
E)  An auditor statement.F) A) and B)
G) B) and E)

Question 12

Match between columns
                        Premises: Dividend Yield
Accounts Receivable Turnover
Price Earnings Ratio
Equity Ratio
Times Interest Earned
Days' Sales in Inventory
Inventory Turnover
Debt Ratio
Return on Total Assets
Basic Earnings per Share

Accepted Answer

The Answer of Liquidity and Efficiency and Solvency and Profitability is...

Question 13

The dollar change for a comparative financial statement item is calculated by:

Accepted Answer

A)  Subtracting the base period amount from the analysis period amount.
B)  Subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, then multiplying that amount by 100.
C)  Subtracting the analysis period amount from the base period amount.
D)  Subtracting the base period amount from the analysis amount, then dividing the result by the base amount.
E)  Subtracting the analysis period amount from the base period amount, dividing the result by the base period amount, then multiplying that amount by 100.F) B) and D)
G) A) and E)

Question 14

Match each of the following terms with the appropriate formulas.
- Income before interest expense and income taxes Interest expense \frac{	ext {Income before interest expense and income taxes  }}{	ext {Interest expense }}Interest expense Income before interest expense and income taxes ​

Accepted Answer

A)  Days' sales in inventory
B)  Dividend yield
C)  Total asset turnover
D)  Inventory turnover
E)  Return on common stockholders' equityF) Gross margin ratioG) Days' sales uncollectedH) Profit margin ratioI) Times interest earnedJ) Debt ratio K) G) and H)
L) B) and E)

Question 15

When no value is in the base period, no percent change is computable.

Accepted Answer

A) True 
 B)False

Question 16

Jones Corp. reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet. The working capital is:

Accepted Answer

A)  71%.
B)  41%.
C)  $56,000.
D)  141%.
E)  ($56,000) .F) B) and C)
G) A) and D)

Question 17

Powers Company reported Net sales of $1,200,000 and average Accounts Receivable, net of $78,500. The accounts receivable turnover ratio is:

Accepted Answer

A)  15.3 times.
B)  16.3 times.
C)  14.3 times.
D)  28.6 times.
E)  0.65 times.F) C) and D)
G) B) and E)

Question 18

Identify and explain the four building blocks of financial statement analysis.

Accepted Answer

The four usual building blocks of financ...

Question 19

Common-size statements:

Accepted Answer

A)  Compare financial statements over time.
B)  Show the dollar amount of change for financial statement items.
C)  Do not emphasize the relative importance of each item.
D)  Reveal patterns in data across successive periods.
E)  Reveal changes in the relative importance of each financial statement item to a base amount.F) A) and E)
G) A) and D)

Question 20

Liquidity and efficiency are the ability to meet short-term obligations and to efficiently generate revenue.

Accepted Answer

A) True 
 B)False

Exam 17: Analysis of Financial Statements

Profitability is the ability to generate future revenues and meet long-term obligations.

Correct Answer
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Match each of the following terms with the appropriate formulas. - $\frac{\text {Income before interest expense and income taxes }}{\text {Interest expense }}$

Correct Answer
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The percent change of a comparative financial statement item is computed by subtracting the base period amount from the analysis period amount, dividing the result by the base period amount and multiplying that result by 100.

Correct Answer
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Common-size statements:

Correct Answer
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To compute trend percentages the analyst should:

Correct Answer
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Jones Corp. reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet. The working capital is:

Correct Answer
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Standards for comparison are not generally necessary when making judgments about a company's performance.

Correct Answer
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When no value is in the base period, no percent change is computable.

Correct Answer
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Net sales divided by Average accounts receivable, net is the:

Correct Answer
verified

Correct Answer
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Financial statement analysis applies analytical tools to financial statements and related data for making business decisions.

Correct Answer
verified

Ratios must refer to economically important relationships, such as a sale price compared to its cost.

Correct Answer
verified

Horizontal analysis is used to reveal changes in the relative importance of each financial statement item.

Correct Answer
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Identify the financial analysis building block most appropriately associated with each ratio listed below. Each building block may be used more than once.

The market price of Horokhiv Corporation's common stock at the start of 2016 was $47.50 and it declared and paid cash dividends of $3.28 per share. The Dividend yield ratio is:

Correct Answer
verified

Liquidity and efficiency are the ability to meet short-term obligations and to efficiently generate revenue.

Correct Answer
verified

Powers Company reported Net sales of $1,200,000 and average Accounts Receivable, net of $78,500. The accounts receivable turnover ratio is:

Correct Answer
verified

Identify and explain the four building blocks of financial statement analysis.

Correct Answer
verified
The four usual building blocks of financ...
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The dollar change for a comparative financial statement item is calculated by:

Correct Answer
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A financial statement analysis report does not include:

Correct Answer
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Exam 17: Analysis of Financial Statements

Profitability is the ability to generate future revenues and meet long-term obligations.

Correct AnswerverifiedShow Answer

Match each of the following terms with the appropriate formulas. - Income before interest expense and income taxes Interest expense \frac{\text {Income before interest expense and income taxes }}{\text {Interest expense }}Interest expense Income before interest expense and income taxes ​

Correct AnswerverifiedShow Answer

The percent change of a comparative financial statement item is computed by subtracting the base period amount from the analysis period amount, dividing the result by the base period amount and multiplying that result by 100.

Correct AnswerverifiedShow Answer

Common-size statements:

Correct AnswerverifiedShow Answer

To compute trend percentages the analyst should:

Correct AnswerverifiedShow Answer

Jones Corp. reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet. The working capital is:

Correct AnswerverifiedShow Answer

Standards for comparison are not generally necessary when making judgments about a company's performance.

Correct AnswerverifiedShow Answer

When no value is in the base period, no percent change is computable.

Correct AnswerverifiedShow Answer

Net sales divided by Average accounts receivable, net is the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Financial statement analysis applies analytical tools to financial statements and related data for making business decisions.

Correct AnswerverifiedShow Answer

Ratios must refer to economically important relationships, such as a sale price compared to its cost.

Correct AnswerverifiedShow Answer

Horizontal analysis is used to reveal changes in the relative importance of each financial statement item.

Correct AnswerverifiedShow Answer

Identify the financial analysis building block most appropriately associated with each ratio listed below. Each building block may be used more than once.

The market price of Horokhiv Corporation's common stock at the start of 2016 was $47.50 and it declared and paid cash dividends of $3.28 per share. The Dividend yield ratio is:

Correct AnswerverifiedShow Answer

Liquidity and efficiency are the ability to meet short-term obligations and to efficiently generate revenue.

Correct AnswerverifiedShow Answer

Powers Company reported Net sales of $1,200,000 and average Accounts Receivable, net of $78,500. The accounts receivable turnover ratio is:

Correct AnswerverifiedShow Answer

Identify and explain the four building blocks of financial statement analysis.

Correct AnswerverifiedThe four usual building blocks of financ...View AnswerShow Answer

The dollar change for a comparative financial statement item is calculated by:

Correct AnswerverifiedShow Answer

A financial statement analysis report does not include:

Correct AnswerverifiedShow Answer

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verified

Match each of the following terms with the appropriate formulas. - $\frac{\text {Income before interest expense and income taxes }}{\text {Interest expense }}$

Correct Answer
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The four usual building blocks of financ...
View Answer

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