Question 1

Accounts receivable turnover shows how often a company converts its average accounts receivable balance into cash during the period.

Accepted Answer

A) True 
 B)False

Question 2

Industry standards for financial statement analysis

Accepted Answer

A)  Are based on a company's prior performance
B)  Are set by competitors
C)  Are set by the company's industry
D)  Are based on rules of thumb
E)  Are based on a company's prior performance and on rules of thumbF) B) and D)
G) B) and C)

Question 3

The following is selected information for Oskano Corp:
   Calculate the following: (a)Accounts receivable turnover.(b)Merchandise turnover.(c)Days' sales uncollected.

Accepted Answer

The answer of The following is selected information for Oskano...

Question 4

The times interest earned ratio measures:

Accepted Answer

A)  A firm's ability to pay its bills on time
B)  A company's profitability
C)  A company's ability to pay interest even if sales decline
D)  The relationship between income and debt
E)  The relationship between assets and liabilitiesF) A) and E)
G) A) and B)

Question 5

The comparative income statement for Aveta Manufacturing is shown below: Calculate trend percentages for all income statement amounts shown.Use 2020 as the base year.

Accepted Answer

The answer of The comparative income statement for Aveta Manufacturing...

Question 6

Quantum's earnings per share is $2.47.The dividend per share is $.25 and the market price per share is $45.The price-earnings ratio is 5.5.

Accepted Answer

A) True 
 B)False

Question 7

Changes in the profit margin ratio could indicate changes in any of the following except changes in

Accepted Answer

A)  The company's pricing practices
B)  The company's sales volume
C)  The company's costing structure
D)  The profitability of the company's product
E)  None of theseF) B) and D)
G) A) and B)

Question 8

Intracompany standards for financial statement analysis

Accepted Answer

A)  Are based on a company's prior performance
B)  Are set by competitors
C)  Are set by the company's industry
D)  Are based on rules of thumb
E)  Are based on a company's prior performance and on rules of thumbF) C) and E)
G) B) and C)

Question 9

Off the Record's quick assets are $127,000.With current liabilities of $143,000,Off the Record's acid-test ratio is 1.03 to 1.

Accepted Answer

A) True 
 B)False

Question 10

Music City had profit of $43,000,net sales of $380,500 and average total assets of $220,000.Its profit margin and total asset turnover were respectively

Accepted Answer

A)  11.3%; 1.73
B)  11.3%; 11.3
C)  1.73%; 19.5
D)  11.3%; 19.5
E)  19.5%; 11.3F) B) and C)
G) A) and E)

Question 11

Brown Company has profit of $125,000.Its net sales were $1,739,000 and its average total assets were $2,750,000.Its profit margin was 7.2%.

Accepted Answer

A) True 
 B)False

Question 12

The pledged assets to secured liabilities ratio

Accepted Answer

A)  Is calculated by dividing book value of secured liabilities by book value of pledged assets
B)  Can be calculated from the book value of assets and liabilities
C)  Is not relevant to secured creditors
D)  Can always be calculated from information provided in the financial statements
E)  Is a method of determining if the pledged assets of a debtor will provide adequate security for a creditorF) B) and D)
G) A) and E)

Question 13

The pledged assets to secured liabilities ratio is calculated by dividing secured liabilities by pledged assets.

Accepted Answer

A) True 
 B)False

Question 14

Voyarge Corporation has the following balance sheet:
  Calculate the current ratio and the acid-test ratio.

Accepted Answer

The answer of Voyarge Corporation has the following balance sheet:
...

Question 15

Profit margin is sales divided by profit.

Accepted Answer

A) True 
 B)False

Question 16

The acid-test ratio is current assets divided by current liabilities.

Accepted Answer

A) True 
 B)False

Question 17

Times interest earned is calculated by

Accepted Answer

A)  Multiplying interest times income
B)  Dividing income before interest and income taxes by interest expense
C)  Dividing interest expense by income before interest
D)  Dividing interest expense by income before interest times interest
E)  Dividing income before interest and income taxes by interest expense times interestF) C) and D)
G) A) and C)

Question 18

Dividend yield is calculated by dividing annual cash dividends per common share by the market price per share.

Accepted Answer

A) True 
 B)False

Question 19

Vertical analysis is used to reveal patterns in data covering successive periods.

Accepted Answer

A) True 
 B)False

Question 20

The ability to generate future revenues and meet long-term obligations is called

Accepted Answer

A)  Liquidity and efficiency
B)  Profitability
C)  Solvency
D)  Market
E)  CreditworthinessF) A) and B)
G) D) and E)

Exam 9: Analyzing Financial Statements

Dividend yield is calculated by dividing annual cash dividends per common share by the market price per share.

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The pledged assets to secured liabilities ratio is calculated by dividing secured liabilities by pledged assets.

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The times interest earned ratio measures:

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Quantum's earnings per share is $2.47.The dividend per share is $.25 and the market price per share is $45.The price-earnings ratio is 5.5.

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The ability to generate future revenues and meet long-term obligations is called

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Accounts receivable turnover shows how often a company converts its average accounts receivable balance into cash during the period.

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The acid-test ratio is current assets divided by current liabilities.

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Intracompany standards for financial statement analysis

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Industry standards for financial statement analysis

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The comparative income statement for Aveta Manufacturing is shown below: Calculate trend percentages for all income statement amounts shown.Use 2020 as the base year.

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Music City had profit of $43,000,net sales of $380,500 and average total assets of $220,000.Its profit margin and total asset turnover were respectively

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Voyarge Corporation has the following balance sheet: Calculate the current ratio and the acid-test ratio.

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The following is selected information for Oskano Corp: Calculate the following: (a)Accounts receivable turnover.(b)Merchandise turnover.(c)Days' sales uncollected.

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Changes in the profit margin ratio could indicate changes in any of the following except changes in

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Profit margin is sales divided by profit.

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Times interest earned is calculated by

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Brown Company has profit of $125,000.Its net sales were $1,739,000 and its average total assets were $2,750,000.Its profit margin was 7.2%.

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Off the Record's quick assets are $127,000.With current liabilities of $143,000,Off the Record's acid-test ratio is 1.03 to 1.

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The pledged assets to secured liabilities ratio

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Vertical analysis is used to reveal patterns in data covering successive periods.

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