Question 1

-Return on equity is: _____________

Accepted Answer

The answer of 
-Return on equity is: _____________...

Question 2

-Calculate the total liabilities change in dollars and in percentage between the years 2011 and 2012 
 In dollars _____________
 In percentage _____________

Accepted Answer

In dollars...

Question 3

Horizontal analysis is done by reviewing two consecutive financial statements and then, comparing the differences between the two periods.

Accepted Answer

A) True 
 B)False

Question 4

Which ratio is most likely to interest marketing managers?

Accepted Answer

A)   debt-to-total assets
B)   profit margin on revenue
C)   current ratio
D)   total assets turnoverE) A) and D)
F) A) and C)

Question 5

If the times-interest-earned ratio changed from 6 times to 4 times over a number of years suggest an improvement.

Accepted Answer

A) True 
 B)False

Question 6

Which ratio measures solvency?

Accepted Answer

A)   debt-to-equity ratio
B)   return on total assets ratio
C)   total assets turnover ratio
D)   return on revenue ratioE) B) and D)
F) A) and C)

Question 7

Which of the following is divided by inventory to calculate the inventory turnover ratio?

Accepted Answer

A)   total assets
B)   gross profit
C)   cost of sales
D)   operating expensesE) A) and C)
F) C) and D)

Question 8

-Identify with a check mark, which ratios show an improvement between the two years:

Accepted Answer

The answer of 
-Identify with a check mark, which ratios...

Question 9

Vertical analysis helps managers to analyze a company's performance over a number of years.

Accepted Answer

A) True 
 B)False

Question 10

Match the words with the term.
-short-term cash

Accepted Answer

A)   liquidity
B)   debt/coverage
C)   asset-management
D)   profitability
E)   market-valueF) A) and B)
G) B) and C)

Question 11

A company has $600,000 in short-term borrowings and $800,000 in long-term borrowings. What is the total equity and liabilities when using a vertical analysis of the statement of financial position?

Accepted Answer

A)   25%
B)   100%
C)   $(200,000) 
D)   $1,400,000E) B) and D)
F) A) and B)

Question 12

-Total current assets: _________________

Accepted Answer

The answer of 
-Total current assets: _________________...

Question 13

Match the words with the term.
-fixed-charges-coverage ratio

Accepted Answer

A)   lease
B)   finance costs
C)   trade receivables
D)   common shares
E)   revenueF) None of the above
G) A) and C)

Question 14

The higher the debt-to-total-assets ratio the better it is.

Accepted Answer

A) True 
 B)False

Question 15

The times-interest-earned ratio shows the number of dollars of profit before taxes plus finance costs that is available to pay each dollar of ______________________ costs.

Accepted Answer

The answer of The times-interest-earned ratio shows the number of...

Question 16

If the current ratio was 1.95 in 2012 and is 1.86 in 2013, how would managers interpret this change?

Accepted Answer

A)   A current ratio of 1.95 is worse than a 1.86 ratio.
B)   Both ratios are unacceptable because they are greater than 1.0.
C)   A current ratio of 1.95 means that there is $1.95 of total assets for each dollar of liabilities.
D)   The current ratio has worsened during the year, but it appears to be still acceptable.E) All of the above
F) None of the above

Question 17

-The return on total assets ratio is: _________________

Accepted Answer

The answer of 
-The return on total assets ratio is:...

Question 18

Match the words with the term.
-capital structure

Accepted Answer

A)   liquidity
B)   debt/coverage
C)   asset-management
D)   profitability
E)   market-valueF) None of the above
G) D) and E)

Question 19

Which ratio is most likely to interest a production manager?

Accepted Answer

A)   debt-to-total-assets
B)   return on sales
C)   inventory turnover
D)   current ratioE) All of the above
F) A) and B)

Question 20

-Profit before taxes: _________________

Accepted Answer

The answer of 
-Profit before taxes: _________________...

Exam 4: Financial Statement Analysis

Which of the following is divided by inventory to calculate the inventory turnover ratio?

Correct AnswerverifiedShow Answer

A company has $600,000 in short-term borrowings and $800,000 in long-term borrowings. What is the total equity and liabilities when using a vertical analysis of the statement of financial position?

Correct AnswerverifiedShow Answer

Match the words with the term. -capital structure

Correct AnswerverifiedShow Answer

If the times-interest-earned ratio changed from 6 times to 4 times over a number of years suggest an improvement.

Correct AnswerverifiedShow Answer

The higher the debt-to-total-assets ratio the better it is.

Correct AnswerverifiedShow Answer

Which ratio is most likely to interest marketing managers?

Correct AnswerverifiedShow Answer

Which ratio is most likely to interest a production manager?

Correct AnswerverifiedShow Answer

-Total current assets: _________________

Correct AnswerverifiedShow Answer

Horizontal analysis is done by reviewing two consecutive financial statements and then, comparing the differences between the two periods.

Correct AnswerverifiedShow Answer

Vertical analysis helps managers to analyze a company's performance over a number of years.

Correct AnswerverifiedShow Answer

-Return on equity is: _____________

Correct AnswerverifiedShow Answer

Which ratio measures solvency?

Correct AnswerverifiedShow Answer

-Calculate the total liabilities change in dollars and in percentage between the years 2011 and 2012 In dollars _____________ In percentage _____________

Correct AnswerverifiedIn dollars...View AnswerShow Answer

-Profit before taxes: _________________

Correct AnswerverifiedShow Answer

The times-interest-earned ratio shows the number of dollars of profit before taxes plus finance costs that is available to pay each dollar of ______________________ costs.

Correct AnswerverifiedShow Answer

-The return on total assets ratio is: _________________

Correct AnswerverifiedShow Answer

If the current ratio was 1.95 in 2012 and is 1.86 in 2013, how would managers interpret this change?

Correct AnswerverifiedShow Answer

Match the words with the term. -fixed-charges-coverage ratio

Correct AnswerverifiedShow Answer

Match the words with the term. -short-term cash

Correct AnswerverifiedShow Answer

-Identify with a check mark, which ratios show an improvement between the two years:

Correct AnswerverifiedShow Answer

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-Calculate the total liabilities change in dollars and in percentage between the years 2011 and 2012 In dollars _ In percentage _

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In dollars...
View Answer

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