Question 1

A company that has days' sales uncollected of 30 days and days' sales in inventory of 18 days implies that inventory will be converted to cash in about 12 days.

Accepted Answer

A) True 
 B)False

Question 2

The measurement of key relationships between financial statement items is known as ________________.

Accepted Answer

The answer of The measurement of key relationships between financial...

Question 3

Dividing ending inventory by cost of goods sold and multiplying the result by 365 is the:

Accepted Answer

A)  Inventory turnover ratio.
B)  Profit margin.
C)  Days' sales in inventory.
D)  Current ratio.
E)  Total asset turnover.F) All of the above
G) B) and C)

Question 4

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

Accepted Answer

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

Question 5

A company's sales in Year 1 were $250,000 and in Year 2 were $287,500.Using Year 1 as the base year,the percentage change for Year 2 compared to the base year is:

Accepted Answer

A)  87%.
B)  100%.
C)  115%.
D)  15%.
E)  13%.F) A) and D)
G) A) and C)

Question 6

The return on total assets can be calculated as profit margin times total asset turnover.

Accepted Answer

A) True 
 B)False

Question 7

Jones Corp.reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet.The current assets consisted of $62,000 Cash;$43,000 Accounts Receivable;and $88,000 of Inventory.The acid-test (quick) ratio is:

Accepted Answer

A)  1.4:1.
B)  0.77:1.
C)  0.54:1.
D)  1:1.
E)  0.64:1.F) B) and D)
G) B) and C)

Question 8

Annual cash dividends per share divided by market price per share is the:

Accepted Answer

A)  Price-earnings ratio.
B)  Price-dividends ratio.
C)  Profit margin.
D)  Dividend yield ratio.
E)  Earnings per share.F) B) and D)
G) B) and E)

Question 9

All of the following are true of financial statement analysis report,except:

Accepted Answer

A)  Contains ambiguities and qualifications.
B)  Forces preparers to organize their reasoning and to verify the logic of analysis.
C)  Serves as a method of communication to users.
D)  Helps users and preparers to refine conclusions based on evidence from key building blocks.
E)  Enables readers to see the process and rationale of analysis.F) A) and E)
G) C) and D)

Question 10

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.F) A) and B)
G) A) and C)

Question 11

Use the following selected information from Wheeler,LLC to determine the 2015 and 2014 trend percentages for cost of goods sold using 2014 as the base.

Accepted Answer

A)  36.4% for 2015 and 41.1% for 2014.
B)  55.0% for 2015 and 56.0% for 2014.
C)  119.4% for 2015 and 100.0% for 2014.
D)  117.2% for 2015 and 100.0% for 2014.
E)  65.1% for 2015 and 64.6% for 2014.F) All of the above
G) B) and C)

Question 12

Net income divided by net sales is the:

Accepted Answer

A)  Return on total assets.
B)  Profit margin.
C)  Current ratio.
D)  Total asset turnover.
E)  Days' sales in inventory.F) A) and E)
G) None of the above

Question 13

Net income divided by average total assets is:

Accepted Answer

A)  Profit margin.
B)  Total asset turnover.
C)  Return on total assets.
D)  Days' income in assets.
E)  Current ratio.F) A) and D)
G) None of the above

Question 14

The current ratio is calculated as current liabilities divided by current assets.

Accepted Answer

A) True 
 B)False

Question 15

The higher the accounts receivable turnover,the less quickly accounts receivable are collected.

Accepted Answer

A) True 
 B)False

Question 16

Refer to the following selected financial information from Shakley's Incorporated.Compute the company's profit margin for Year 2.

Accepted Answer

A)  14.1%.
B)  11.7%.
C)  9.6%.
D)  16.7%.
E)  33.9%.F) C) and D)
G) D) and E)

Question 17

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

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> Comments: Although a smaller percent of...

Question 18

The following summaries from the income statements and balance sheets of Kouris Company and Brittania,Inc.are presented below.
(1)For both companies for 2016,compute the:
(a)Current ratio
(b)Acid-test ratio
(c)Accounts receivable turnover
(d)Inventory turnover
(e)Days' sales in inventory
(f)Days' sales uncollected
Which company do you consider to be the better short-term credit risk? Explain.
(2)For both companies for 2016,compute the:
(a)Profit margin ratio
(b)Return on total assets
(c)Return on common stockholders' equity
Which company do you consider to have better profitability ratios?

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> Brittania has higher current ratios and...

Question 19

Zhang Company reported Cost of goods sold of $835,000,beginning Inventory of $37,200 and ending Inventory of $46,300.The average Inventory amount is:

Accepted Answer

A)  $37,200.
B)  $46,300.
C)  $83,500.
D)  $41,750.
E)  $9,100.F) C) and D)
G) A) and C)

Question 20

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

Accepted Answer

The answer of The comparison of a company's financial condition...

Exam 17: Analysis of Financial Statements

A company's sales in Year 1 were $250,000 and in Year 2 were $287,500.Using Year 1 as the base year,the percentage change for Year 2 compared to the base year is:

Correct Answer
verified

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

Correct Answer
verified

Annual cash dividends per share divided by market price per share is the:

Correct Answer
verified

Correct Answer
verified
Brittania has higher current ratios and...
View Answer

Jones Corp.reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet.The current assets consisted of $62,000 Cash;$43,000 Accounts Receivable;and $88,000 of Inventory.The acid-test (quick) ratio is:

Correct Answer
verified

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

Correct Answer
verified

Refer to the following selected financial information from Shakley's Incorporated.Compute the company's profit margin for Year 2.

Correct Answer
verified

Dividing ending inventory by cost of goods sold and multiplying the result by 365 is the:

Correct Answer
verified

All of the following are true of financial statement analysis report,except:

Correct Answer
verified

The measurement of key relationships between financial statement items is known as ________________.

Correct Answer
verified

Use the following selected information from Wheeler,LLC to determine the 2015 and 2014 trend percentages for cost of goods sold using 2014 as the base.

Correct Answer
verified

The return on total assets can be calculated as profit margin times total asset turnover.

Correct Answer
verified

A company that has days' sales uncollected of 30 days and days' sales in inventory of 18 days implies that inventory will be converted to cash in about 12 days.

Correct Answer
verified

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

Correct Answer
verified
Comments: Although a smaller percent of...
View Answer

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

Correct Answer
verified

Zhang Company reported Cost of goods sold of $835,000,beginning Inventory of $37,200 and ending Inventory of $46,300.The average Inventory amount is:

Correct Answer
verified

Net income divided by average total assets is:

Correct Answer
verified

The current ratio is calculated as current liabilities divided by current assets.

Correct Answer
verified

Net income divided by net sales is the:

Correct Answer
verified

The higher the accounts receivable turnover,the less quickly accounts receivable are collected.

Correct Answer
verified

Exam 17: Analysis of Financial Statements

A company's sales in Year 1 were $250,000 and in Year 2 were $287,500.Using Year 1 as the base year,the percentage change for Year 2 compared to the base year is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Annual cash dividends per share divided by market price per share is the:

Correct AnswerverifiedShow Answer

Correct Answerverified Brittania has higher current ratios and...View AnswerShow Answer

Jones Corp.reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet.The current assets consisted of $62,000 Cash;$43,000 Accounts Receivable;and $88,000 of Inventory.The acid-test (quick) ratio is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Refer to the following selected financial information from Shakley's Incorporated.Compute the company's profit margin for Year 2.

Correct AnswerverifiedShow Answer

Dividing ending inventory by cost of goods sold and multiplying the result by 365 is the:

Correct AnswerverifiedShow Answer

All of the following are true of financial statement analysis report,except:

Correct AnswerverifiedShow Answer

The measurement of key relationships between financial statement items is known as ________________.

Correct AnswerverifiedShow Answer

Use the following selected information from Wheeler,LLC to determine the 2015 and 2014 trend percentages for cost of goods sold using 2014 as the base.

Correct AnswerverifiedShow Answer

The return on total assets can be calculated as profit margin times total asset turnover.

Correct AnswerverifiedShow Answer

A company that has days' sales uncollected of 30 days and days' sales in inventory of 18 days implies that inventory will be converted to cash in about 12 days.

Correct AnswerverifiedShow Answer

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

Correct Answerverified Comments: Although a smaller percent of...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Zhang Company reported Cost of goods sold of $835,000,beginning Inventory of $37,200 and ending Inventory of $46,300.The average Inventory amount is:

Correct AnswerverifiedShow Answer

Net income divided by average total assets is:

Correct AnswerverifiedShow Answer

The current ratio is calculated as current liabilities divided by current assets.

Correct AnswerverifiedShow Answer

Net income divided by net sales is the:

Correct AnswerverifiedShow Answer

The higher the accounts receivable turnover,the less quickly accounts receivable are collected.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Brittania has higher current ratios and...
View 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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Correct Answer
verified
Comments: Although a smaller percent of...
View Answer

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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Correct Answer
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