Question 1

The current ratio and acid-test ratio are used to reflect the ____________ of a business.

Accepted Answer

The answer of The current ratio and acid-test ratio are...

Question 2

The gross margin ratio,return on total assets and basic earnings per share are all _____________ ratios.

Accepted Answer

The answer of The gross margin ratio,return on total assets...

Question 3

The common-size percent is computed by:

Accepted Answer

A)  Dividing the analysis amount by the base amount
B)  Dividing the base amount by the analysis amount
C)  Dividing the analysis amount by the base amount and multiplying the result by 100
D)  Dividing the base amount by the analysis amount and multiplying the result by 1,000
E)  Subtracting the base amount from the analysis amount and multiplying the result by 100F) A) and B)
G) D) and E)

Question 4

Describe the purpose of vertical financial statement analysis and how it is applied.

Accepted Answer

Vertical financial statement analysis is...

Question 5

A corporation reported cash of $14,000 and total assets of $178,300.Its common-size percent for cash equals 7.85%.

Accepted Answer

A) True 
 B)False

Question 6

The dollar change for a 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 amountF) D) and E)
G) A) and C)

Question 7

Quick assets divided by current liabilities is equal to the:

Accepted Answer

A)  Acid-test ratio
B)  Current ratio
C)  Working capital ratio
D)  Current liability turnover ratio
E)  Quick asset turnover ratioF) D) and E)
G) All of the above

Question 8

Corona Company's balance sheet accounts follow:
  At December 31201120102009 Assets Cash $25,868$31,163$31,182 Accounts receivable, net 78,03453,99541,152 Merchandise inventory 95,12073,49146,095 Prepaid expenses 8,3308,0993,429 Plant assets,net 241,854218,932199,542 Total assets $449,206$385,680$321,400 Liabilities and Equity  Accounts payable $108,058$67,135$42,849 Long-term notes payable secured by mortgages on  plant assets 85,79187,81971,029 Common stock, $10 par value 162,500162,500162,500 Retained earnings 92,85768,22645,022 Total liabilities and equity $449,206$385,680$321,400\begin{array}{lrrr} 	ext { At December 31}&2011&2010&2009\ 	ext {  Assets}\ 	ext { Cash } & \$ 25,868 & \$ 31,163 & \$ 31,182 \ 	ext { Accounts receivable, net } & 78,034 & 53,995 & 41,152 \ 	ext { Merchandise inventory } & 95,120 & 73,491 & 46,095 \	ext { Prepaid expenses } & 8,330 & 8,099 & 3,429 \ 	ext { Plant assets,net } & 241,854 & 218,932 & 199,542 \ 	ext { Total assets } & \$ 449,206 & \$ 385,680 & \$ 321,400 \	ext { Liabilities and Equity } & & & \	ext { Accounts payable } & \$ 108,058 & \$ 67,135 & \$ 42,849 \	ext { Long-term notes payable secured by mortgages on } & & & \	ext { plant assets } & 85,791 & 87,819 & 71,029 \ 	ext { Common stock, } \$ 10 	ext { par value } & 162,500 & 162,500 & 162,500 \	ext { Retained earnings } &92,857 & 68,226 & 45,022 \	ext { Total liabilities and equity } &\$449,206 & \$ 385,680 & \$ 321,400 \\end{array} At December 31 Assets Cash  Accounts receivable, net  Merchandise inventory  Prepaid expenses  Plant assets,net  Total assets  Liabilities and Equity  Accounts payable  Long-term notes payable secured by mortgages on  plant assets  Common stock, $10 par value  Retained earnings  Total liabilities and equity ​2011$25,86878,03495,1208,330241,854$449,206$108,05885,791162,50092,857$449,206​2010$31,16353,99573,4918,099218,932$385,680$67,13587,819162,50068,226$385,680​2009$31,18241,15246,0953,429199,542$321,400$42,84971,029162,50045,022$321,400​

What is Corona Company's current ratio for 2011?

Accepted Answer

A)  1.96
B)  2.32
C)  1.07
D)  1.92
E)  2.17 F) All of the above
G) B) and C)

Question 9

Measures taken from a selected competitor or a group of competitors are often excellent standards of comparison for analysis.

Accepted Answer

A) True 
 B)False

Question 10

Horizontal analysis is used to reveal changes in the relative importance of each financial statement item.

Accepted Answer

A) True 
 B)False

Exam 13: Analyzing and Interpreting Financial Statements

Quick assets divided by current liabilities is equal to the:

Correct Answer
verified

Describe the purpose of vertical financial statement analysis and how it is applied.

Correct Answer
verified
Vertical financial statement analysis is...
View Answer

Horizontal analysis is used to reveal changes in the relative importance of each financial statement item.

Correct Answer
verified

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

Correct Answer
verified

The common-size percent is computed by:

Correct Answer
verified

The gross margin ratio,return on total assets and basic earnings per share are all _____________ ratios.

Correct Answer
verified

A corporation reported cash of $14,000 and total assets of $178,300.Its common-size percent for cash equals 7.85%.

Correct Answer
verified

The current ratio and acid-test ratio are used to reflect the ____________ of a business.

Correct Answer
verified

Correct Answer
verified

Measures taken from a selected competitor or a group of competitors are often excellent standards of comparison for analysis.

Correct Answer
verified

Exam 13: Analyzing and Interpreting Financial Statements

Quick assets divided by current liabilities is equal to the:

Correct AnswerverifiedShow Answer

Describe the purpose of vertical financial statement analysis and how it is applied.

Correct AnswerverifiedVertical financial statement analysis is...View AnswerShow Answer

Horizontal analysis is used to reveal changes in the relative importance of each financial statement item.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The common-size percent is computed by:

Correct AnswerverifiedShow Answer

The gross margin ratio,return on total assets and basic earnings per share are all _____________ ratios.

Correct AnswerverifiedShow Answer

A corporation reported cash of $14,000 and total assets of $178,300.Its common-size percent for cash equals 7.85%.

Correct AnswerverifiedShow Answer

The current ratio and acid-test ratio are used to reflect the ____________ of a business.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Measures taken from a selected competitor or a group of competitors are often excellent standards of comparison for analysis.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Vertical financial statement analysis is...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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