Question 1

Special items reported as part of comprehensive income,but not included in net income,might include:

Accepted Answer

A)   gains or losses on foreign currency exchange.
B)   interest expense.
C)   extraordinary gains and losses.
D)   income tax expense.E) All of the above
F) B) and C)

Question 2

Which of the following ratios is calculated by dividing current assets by current liabilities?

Accepted Answer

A)   Quick ratio
B)   Solvency ratio
C)   Debt ratio
D)   Current ratioE) A) and B)
F) B) and D)

Question 3

Which of these are solvency ratios?

Accepted Answer

A)   Debt-to-assets
B)   Current ratio
C)   Return on equity
D)   Net profit marginE) A) and C)
F) B) and C)

Question 4

If an analyst wants to examine a company's current ability to generate income,which of the following would best be considered?

Accepted Answer

A)   Liquidity
B)   Market share
C)   Profitability
D)   SolvencyE) B) and C)
F) A) and D)

Question 5

Which of the following ratios is used to evaluate how efficient a company is in using its fixed assets to generate revenues?

Accepted Answer

A)   Current ratio
B)   Debt-to-assets ratio
C)   Return on fixed assets ratio
D)   Fixed asset turnover ratioE) A) and D)
F) B) and D)

Question 6

Which of the following ratios does not use net income in its calculation?

Accepted Answer

A)   Net profit margin
B)   Earnings per share
C)   Return on equity
D)   Fixed asset turnoverE) None of the above
F) B) and C)

Question 7

Nonrecurring items such as a loss from discontinued operations is reported on the income statement:

Accepted Answer

A)   net of income tax.
B)   before income tax expense.
C)   below the net income line.
D)   Nonrecurring items are not subject to income taxes; therefore, they are not reported on the income statement.E) A) and B)
F) All of the above

Question 8

Benchmarks are required to evaluate a company's performance.

Accepted Answer

A) True 
 B)False

Question 9

If you wish to examine how one aspect of a business is doing relative to other aspects of the business at the current time,you are most likely to use:

Accepted Answer

A)   time-series analysis.
B)   ratio analysis.
C)   horizontal analysis. D cross-sectional analysis.D) None of the above
E) A) and B)

Question 10

E.Choudhury Company's price/earnings ratio is 15.3.Its closest competitor,Bhatt,Inc.has a Price/Earnings ratio of 9.4.Which of the following would not be a valid conclusion to draw from a comparison of the two companies' Price/Earnings ratios?

Accepted Answer

A)   E. Choudhury Company's stock is overpriced.
B)   Investors believe E. Choudhury Co. has a brighter future than Bhatt, Inc.
C)   E. Choudhury Company has been more profitable than Bhatt, Inc.
D)   The stock price of E. Choudhury Company has been bid up due to rumors of a merger.E) A) and B)
F) A) and C)

Exam 13: Measuring and Evaluating Financial Performance

Which of the following ratios is calculated by dividing current assets by current liabilities?

Correct Answer
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Which of the following ratios is used to evaluate how efficient a company is in using its fixed assets to generate revenues?

Correct Answer
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Which of the following ratios does not use net income in its calculation?

Correct Answer
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If an analyst wants to examine a company's current ability to generate income,which of the following would best be considered?

Correct Answer
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Special items reported as part of comprehensive income,but not included in net income,might include:

Correct Answer
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Benchmarks are required to evaluate a company's performance.

Correct Answer
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E.Choudhury Company's price/earnings ratio is 15.3.Its closest competitor,Bhatt,Inc.has a Price/Earnings ratio of 9.4.Which of the following would not be a valid conclusion to draw from a comparison of the two companies' Price/Earnings ratios?

Correct Answer
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Which of these are solvency ratios?

Correct Answer
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If you wish to examine how one aspect of a business is doing relative to other aspects of the business at the current time,you are most likely to use:

Correct Answer
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Nonrecurring items such as a loss from discontinued operations is reported on the income statement:

Correct Answer
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Exam 13: Measuring and Evaluating Financial Performance

Which of the following ratios is calculated by dividing current assets by current liabilities?

Correct AnswerverifiedShow Answer

Which of the following ratios is used to evaluate how efficient a company is in using its fixed assets to generate revenues?

Correct AnswerverifiedShow Answer

Which of the following ratios does not use net income in its calculation?

Correct AnswerverifiedShow Answer

If an analyst wants to examine a company's current ability to generate income,which of the following would best be considered?

Correct AnswerverifiedShow Answer

Special items reported as part of comprehensive income,but not included in net income,might include:

Correct AnswerverifiedShow Answer

Benchmarks are required to evaluate a company's performance.

Correct AnswerverifiedShow Answer

E.Choudhury Company's price/earnings ratio is 15.3.Its closest competitor,Bhatt,Inc.has a Price/Earnings ratio of 9.4.Which of the following would not be a valid conclusion to draw from a comparison of the two companies' Price/Earnings ratios?

Correct AnswerverifiedShow Answer

Which of these are solvency ratios?

Correct AnswerverifiedShow Answer

If you wish to examine how one aspect of a business is doing relative to other aspects of the business at the current time,you are most likely to use:

Correct AnswerverifiedShow Answer

Nonrecurring items such as a loss from discontinued operations is reported on the income statement:

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
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Correct Answer
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Correct Answer
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