Question 1

Match the words with the term.
-market-value ratio

Accepted Answer

A)   quick ratio
B)   debt-to-equity ratio
C)   price/earnings ratio
D)   return on revenue
E)   inventory turnover

Question 2

There are three broad categories of ratios: financial statement ratios, statement of income ratios and ___________________________ ratios.

Accepted Answer

The answer of There are three broad categories of ratios:...

Question 3

Match the words with the term.
-liquidity ratio

Accepted Answer

A)   quick ratio
B)   debt-to-equity ratio
C)   price/earnings ratio
D)   return on revenue
E)   inventory turnover

Question 4

-Total current liabilities: _________________

Accepted Answer

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

Question 5

Which of the following measures a company's liquidity?

Accepted Answer

A)   current ratio
B)   average collection period
C)   profit margin on revenue
D)   debt-to-total assets

Question 6

-Calculate the net working capital in terms of dollars and as a percentage of total assets for both years:
 Net working capital ____________ _____________
 Ratios ____________ _____________

Accepted Answer

The answer of 
-Calculate the net working capital in terms...

Question 7

-The total assets turnover is: _________________

Accepted Answer

The answer of 
-The total assets turnover is: _________________...

Question 8

________________________________ plus finance costs and other fixed charges are used as the numerator to calculate the fixed-charges-coverage ratio.

Accepted Answer

The answer of ________________________________ plus finance costs and other fixed...

Question 9

How is the times-interest-earned ratio calculated?

Accepted Answer

A)   by dividing earnings before interest charges by interest charges
B)   by dividing earnings before interest charges and dividends paid to shareholders by interest charges
C)   by dividing earnings before interest charges and taxes by interest charges plus taxes
D)   by dividing earnings before interest charges and taxes by interest charges

Question 10

Company A has a times-interest-earned ratio of 5.9, and company B has a times-interest-earned ratio of 6.4. A is a competitor of B. What conclusions would the chief financial officer of A arrive at looking at these numbers and his competitor's?

Accepted Answer

A)   A times-interest-earned ratio of 5.9 is better than a times-interest-earned ratio of 6.4.
B)   The times-interest-earned ratio is of no interest to lenders because the ratios are so close together.
C)   Company B is in a better position to pay interest than company A.
D)   Company A is in a better position to pay interest than it was last year.

Question 11

-Return on revenue is: _____________

Accepted Answer

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

Question 12

An objective of inventory turnover to increase the number of times inventory should turn over.

Accepted Answer

A) True 
 B)False

Question 13

What is removed from current assets to calculate the quick ratio?

Accepted Answer

A)   marketable securities
B)   cash
C)   trade receivables
D)   inventories

Question 14

-Calculate the shareholders' equity change in dollars and in percentage between the years 2012 and 2011:
 In dollars _____________
 In percentage _____________

Accepted Answer

In dollars...

Question 15

-Debt-to-total assets is: _____________

Accepted Answer

The answer of 
-Debt-to-total assets is: _____________...

Question 16

Why do managers analyze financial statements?

Accepted Answer

A)   to review the company's profitability
B)   to see whether or not the financial statements have been prepared in accordance with generally accepted accounting principles
C)   to see how the company is performing and to use that information to determine whether budgets have been met and goals achieved
D)   to examine the past to gauge past performance and use that information to enhance future performance

Question 17

The real value of financial statement analysis lies in the fact that it can be used to help predict a company's future financial performance.

Accepted Answer

A) True 
 B)False

Question 18

Debt-to-equity ratio measures the proportion of debt used compared to the amount of retained earnings that the business has accumulated over the years.

Accepted Answer

A) True 
 B)False

Question 19

Earnings-per-share is a market-value ratio.

Accepted Answer

A) True 
 B)False

Question 20

-The return on equity ratio is:	_________________

Accepted Answer

The answer of 
-The return on equity ratio is:	_________________...

Exam 4: Financial Statement Analysis

There are three broad categories of ratios: financial statement ratios, statement of income ratios and ___________________________ ratios.

Correct AnswerverifiedShow Answer

The real value of financial statement analysis lies in the fact that it can be used to help predict a company's future financial performance.

Correct AnswerverifiedShow Answer

Match the words with the term. -market-value ratio

Correct AnswerverifiedShow Answer

-The return on equity ratio is: _________________

Correct AnswerverifiedShow Answer

Company A has a times-interest-earned ratio of 5.9, and company B has a times-interest-earned ratio of 6.4. A is a competitor of B. What conclusions would the chief financial officer of A arrive at looking at these numbers and his competitor's?

Correct AnswerverifiedShow Answer

What is removed from current assets to calculate the quick ratio?

Correct AnswerverifiedShow Answer

-Calculate the shareholders' equity change in dollars and in percentage between the years 2012 and 2011: In dollars _____________ In percentage _____________

Correct AnswerverifiedIn dollars...View AnswerShow Answer

-The total assets turnover is: _________________

Correct AnswerverifiedShow Answer

An objective of inventory turnover to increase the number of times inventory should turn over.

Correct AnswerverifiedShow Answer

-Return on revenue is: _____________

Correct AnswerverifiedShow Answer

Which of the following measures a company's liquidity?

Correct AnswerverifiedShow Answer

Why do managers analyze financial statements?

Correct AnswerverifiedShow Answer

Match the words with the term. -liquidity ratio

Correct AnswerverifiedShow Answer

-Total current liabilities: _________________

Correct AnswerverifiedShow Answer

How is the times-interest-earned ratio calculated?

Correct AnswerverifiedShow Answer

Debt-to-equity ratio measures the proportion of debt used compared to the amount of retained earnings that the business has accumulated over the years.

Correct AnswerverifiedShow Answer

-Debt-to-total assets is: _____________

Correct AnswerverifiedShow Answer

Earnings-per-share is a market-value ratio.

Correct AnswerverifiedShow Answer

-Calculate the net working capital in terms of dollars and as a percentage of total assets for both years: Net working capital ____________ _____________ Ratios ____________ _____________

Correct AnswerverifiedShow Answer

________________________________ plus finance costs and other fixed charges are used as the numerator to calculate the fixed-charges-coverage ratio.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

-Calculate the shareholders' equity change in dollars and in percentage between the years 2012 and 2011: In dollars _ In percentage _

Correct Answer
verified
In dollars...
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
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

-Calculate the net working capital in terms of dollars and as a percentage of total assets for both years: Net working capital ______ _ Ratios _______

Correct Answer
verified

Correct Answer
verified