Question 1

A corporation reported cash of $14,000 and total assets of $178,300 on its balance sheet.Its common-size percent for cash equals:

Accepted Answer

A)  .0785%.
B)  7.85%.
C)  12.73%.
D)  1273%.
E)  7850%.F) A) and E)
G) A) and D) B

Question 2

Capital structure refers to a company's long-run financial viability and its ability to cover long-term obligations.

Accepted Answer

A) True 
 B)False  False

Question 3

Guidelines (rules-of-thumb) are general standards of comparison developed from:

Accepted Answer

A)  Industry statistics from the government.
B)  Past experience.
C)  Analysis of competitors.
D)  Relations between financial items.
E)  Dun and Bradstreet.F) B) and E)
G) None of the above

Question 4

Martinez Corporation reported Net sales of $765,000 and Net income of $142,000.The Profit margin is:

Accepted Answer

A)  539.0%.
B)  5.39%.
C)  81.4%.
D)  1.86%.
E)  18.56%.F) A) and B)
G) A) and C)

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

A company's calendar-year financial data are shown below.The company had total assets of $339,000 and total equity of $144,400 for the prior year.No additional shares of common stock were issued during the year.The December 31 market price per share is $49.50.Cash dividends of $19,500 were paid during the year.Calculate the following ratios for the company:
(a)debt ratio
(b)equity ratio
(c)debt-to-equity ratio
(d)times interest earned
(e)total asset turnover

Accepted Answer

The answer of A company's calendar-year financial data are shown...

Question 7

Financial statement analysis involves all of the following except:

Accepted Answer

A)  The application of analytical tools to general-purpose financial statements and related data for making business decisions.
B)  Transforming accounting data into useful information for decision-making.
C)  Helping users to make better decisions.
D)  Helping to reduce uncertainty in decision-making.
E)  Assuring that the company will be more profitable in the future.F) B) and C)
G) A) and B)

Question 8

Powers Company reported Net sales of $1,200,000 and Accounts Receivable,net of $78,500.The Day's sales uncollected (rounded to whole days) is:

Accepted Answer

A)  24 days.
B)  15 days.
C)  4 days.
D)  56 days.
E)  48 days.F) B) and E)
G) All of the above

Question 9

Refer to the following selected financial information from Graphics,Inc.Compute the company's times interest earned.

Accepted Answer

A)  6.2.
B)  2.5.
C)  8.7.
D)  9.7.
E)  3.7.F) None of the above
G) B) and E)

Question 10

The building blocks of financial statement analysis include (1)liquidity, (2)salability, (3)solvency,and (4)profitability.

Accepted Answer

A) True 
 B)False

Question 11

The comparative balance sheet for Silverlight Co.is shown below.Express the balance sheet in common-size percentages.

Accepted Answer

The answer of The comparative balance sheet for Silverlight Co.is...

Question 12

When a company's activities include income-related events not part of normal,continuing operations,the complete income statement could potentially have the following sections:

Accepted Answer

A)  Items from continuing operations and earnings per share for a corporation.
B)  Income or loss from operating a discontinued segment for the current period.
C)  The loss from disposing of the discontinued segment's net assets.
D)  Extraordinary items.
E)  Continuing operations,discontinued segments,extraordinary items,changes in accounting principles,and earnings per share for a corporation.F) B) and D)
G) A) and E)

Question 13

The four building blocks of financial analysis are (1)_____________, (2)____________, (3)____________,and (4)_________________.

Accepted Answer

liquidity and efficiency ;solv...

Question 14

Zhang Company reported Cost of goods sold of $835,000 and average Inventory of $41,750.The Inventory turnover ratio is:

Accepted Answer

A)  0.5 times.
B)  418 times.
C)  20 times.
D)  56 times.
E)  19 times.F) A) and E)
G) B) and E)

Question 15

In horizontal analysis the percent change is computed 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 analysis period amount.F) B) and D)
G) B) and C) D

Question 16

Financial statement analysis is the application of analytical tools to general-purpose financial statements and related data for making business decisions.

Accepted Answer

A) True 
 B)False

Question 17

Refer to the following selected financial information from Frankle Corp.Compute the company's working capital.

Accepted Answer

A)  $536,650.
B)  $230,200.
C)  $568,200.
D)  $198,650.
E)  $231,450.F) C) and E)
G) A) and E)

Question 18

Financial statements with data for two or more successive accounting periods placed in columns side by side,sometimes with changes shown in both dollar amounts and percentages,are referred to as:

Accepted Answer

A)  Period-to-period statements.
B)  Controlling statements.
C)  Successive statements.
D)  Comparative statements.
E)  Serial statements.F) A) and C)
G) B) and C)

Question 19

In order to be classified as an extraordinary gain or loss,the item must be both (1)_______________ and (2)____________.

Accepted Answer

unusual ;infrequent ...

Question 20

Refer to the following selected financial information from McCormik,LLC.Compute the company's days' sales uncollected for Year 2.

Accepted Answer

A)  43.9.
B)  42.3.
C)  46.2.
D)  80.0.
E)  113.3.F) B) and D)
G) A) and C)

Exam 17: Analysis of Financial Statements

A corporation reported cash of $14,000 and total assets of $178,300 on its balance sheet.Its common-size percent for cash equals:

Correct Answer
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B

Capital structure refers to a company's long-run financial viability and its ability to cover long-term obligations.

Correct Answer
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False

Guidelines (rules-of-thumb) are general standards of comparison developed from:

Correct Answer
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Martinez Corporation reported Net sales of $765,000 and Net income of $142,000.The Profit margin is:

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

Correct Answer
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Correct Answer
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Financial statement analysis involves all of the following except:

Correct Answer
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Powers Company reported Net sales of $1,200,000 and Accounts Receivable,net of $78,500.The Day's sales uncollected (rounded to whole days) is:

Correct Answer
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Refer to the following selected financial information from Graphics,Inc.Compute the company's times interest earned.

Correct Answer
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The building blocks of financial statement analysis include (1)liquidity, (2)salability, (3)solvency,and (4)profitability.

Correct Answer
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The comparative balance sheet for Silverlight Co.is shown below.Express the balance sheet in common-size percentages.

Correct Answer
verified

When a company's activities include income-related events not part of normal,continuing operations,the complete income statement could potentially have the following sections:

Correct Answer
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The four building blocks of financial analysis are (1)_, (2), (3),and (4)_____.

Correct Answer
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liquidity and efficiency ;solv...
View Answer

Zhang Company reported Cost of goods sold of $835,000 and average Inventory of $41,750.The Inventory turnover ratio is:

Correct Answer
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In horizontal analysis the percent change is computed by:

Correct Answer
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D

Financial statement analysis is the application of analytical tools to general-purpose financial statements and related data for making business decisions.

Correct Answer
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Refer to the following selected financial information from Frankle Corp.Compute the company's working capital.

Correct Answer
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Financial statements with data for two or more successive accounting periods placed in columns side by side,sometimes with changes shown in both dollar amounts and percentages,are referred to as:

Correct Answer
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In order to be classified as an extraordinary gain or loss,the item must be both (1)___ and (2).

Correct Answer
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unusual ;infrequent ...
View Answer

Refer to the following selected financial information from McCormik,LLC.Compute the company's days' sales uncollected for Year 2.

Correct Answer
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Exam 17: Analysis of Financial Statements

A corporation reported cash of $14,000 and total assets of $178,300 on its balance sheet.Its common-size percent for cash equals:

Correct AnswerverifiedB

Capital structure refers to a company's long-run financial viability and its ability to cover long-term obligations.

Correct AnswerverifiedFalse

Guidelines (rules-of-thumb) are general standards of comparison developed from:

Correct AnswerverifiedShow Answer

Martinez Corporation reported Net sales of $765,000 and Net income of $142,000.The Profit margin is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Financial statement analysis involves all of the following except:

Correct AnswerverifiedShow Answer

Powers Company reported Net sales of $1,200,000 and Accounts Receivable,net of $78,500.The Day's sales uncollected (rounded to whole days) is:

Correct AnswerverifiedShow Answer

Refer to the following selected financial information from Graphics,Inc.Compute the company's times interest earned.

Correct AnswerverifiedShow Answer

The building blocks of financial statement analysis include (1)liquidity, (2)salability, (3)solvency,and (4)profitability.

Correct AnswerverifiedShow Answer

The comparative balance sheet for Silverlight Co.is shown below.Express the balance sheet in common-size percentages.

Correct AnswerverifiedShow Answer

When a company's activities include income-related events not part of normal,continuing operations,the complete income statement could potentially have the following sections:

Correct AnswerverifiedShow Answer

The four building blocks of financial analysis are (1)_____________, (2)____________, (3)____________,and (4)_________________.

Correct Answerverifiedliquidity and efficiency ;solv...View AnswerShow Answer

Zhang Company reported Cost of goods sold of $835,000 and average Inventory of $41,750.The Inventory turnover ratio is:

Correct AnswerverifiedShow Answer

In horizontal analysis the percent change is computed by:

Correct AnswerverifiedD

Financial statement analysis is the application of analytical tools to general-purpose financial statements and related data for making business decisions.

Correct AnswerverifiedShow Answer

Refer to the following selected financial information from Frankle Corp.Compute the company's working capital.

Correct AnswerverifiedShow Answer

Financial statements with data for two or more successive accounting periods placed in columns side by side,sometimes with changes shown in both dollar amounts and percentages,are referred to as:

Correct AnswerverifiedShow Answer

In order to be classified as an extraordinary gain or loss,the item must be both (1)_______________ and (2)____________.

Correct Answerverifiedunusual ;infrequent ...View AnswerShow Answer

Refer to the following selected financial information from McCormik,LLC.Compute the company's days' sales uncollected for Year 2.

Correct AnswerverifiedShow Answer

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B

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False

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The four building blocks of financial analysis are (1)_, (2), (3),and (4)_____.

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liquidity and efficiency ;solv...
View Answer

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D

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In order to be classified as an extraordinary gain or loss,the item must be both (1)___ and (2).

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unusual ;infrequent ...
View Answer

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