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Which of the following nonfinancial factors is most likely to be a cause of a going-concern problem?


A) Hiring a new CEO.
B) Loss of a key patent.
C) Announcing a new stock issue.
D) Replacing an old product line.

E) A) and D)
F) B) and D)

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Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The gross profit percentage is closest to:


A) 32%.
B) 56%.
C) 86%.
D) 14%.

E) A) and D)
F) All of the above

Correct Answer

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Use the information above to answer the following question.Which of the following is closest to the company's earnings per share for the current year?


A) $10.00
B) $20.00
C) $7.25
D) $7.50

E) A) and C)
F) B) and C)

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D

A condensed balance sheet for Liu Company is presented below: A condensed balance sheet for Liu Company is presented below: A.Prepare a vertical analysis of the balance sheet above.Round to the nearest whole percent. B.Interpret your analysis.Identify significant items.Comment on key relationships. A.Prepare a vertical analysis of the balance sheet above.Round to the nearest whole percent. B.Interpret your analysis.Identify significant items.Comment on key relationships.

Correct Answer

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A. blured image B.Liu has a large portion of its ass...

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Which of the following statements regarding the effects of a business decision on a financial ratio is true?


A) If a company is expanding its facilities,its fixed asset turnover ratio is likely to fall temporarily.
B) If a company extends its payment period for customers,its accounts receivable ratio is likely to rise.
C) If a company eases its credit granting policies,its days to collect ratio is likely to fall.
D) If a company builds up inventories,its days to sell ratio is likely to fall.

E) None of the above
F) B) and C)

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Which of the following measures would assist in assessing the profitability of a company?


A) Asset turnover.
B) Times interest earned ratio.
C) Inventory turnover ratio.
D) Debt to assets ratio.

E) B) and C)
F) A) and D)

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Choose the appropriate letter to match the term and the definition.Not all definitions will be used. Term _______ Time-series analysis _______ Common-size financial statements _______ Management discussion and analysis _______ P/E ratio _______ Earnings per share _______ Comprehensive income _______ Discontinued operations _______ Net income Definition A)The practice of reporting accounting data in the national monetary unit. B)A nonrecurring item associated with abandoning or selling an operation. C)The earnings of a company after taxes. D)An increase in an asset or a decrease in a liability that results from peripheral activities. E)After-tax earnings adjusted for gains and losses that may disappear before they are realized. F)A section of the annual report that can be used in interpreting the results of financial statement analysis. G)The ratio calculated by dividing the net income by the number of common shares outstanding. H)The ratio calculated by dividing the price of a share of stock by the earnings per share. I)Also known as ratio analysis. J)A nonrecurring item on the income statement that reflects gains and losses associated with extraordinary events. K)Another name for a trend analysis. L)The practice of reporting information in percentages rather than monetary amounts.

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On a common size income statement for this year,what is the percentage that would be shown for cost of goods sold?


A) 76%
B) 24%
C) 31%
D) 18%

E) None of the above
F) A) and C)

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Solvency ratio data are primarily concerned with the ability of a company to:


A) produce profits.
B) handle its debt.
C) manage its cash flow.
D) provide income for stockholders.

E) All of the above
F) A) and D)

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On a common size balance sheet,the percentage that should be shown for current assets is closest to


A) 100%
B) 44%
C) 30%
D) 33%

E) C) and D)
F) A) and D)

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B

Which of the following ratios is calculated by dividing liquid assets by current liabilities?


A) Current ratio.
B) Quick ratio.
C) Turnover ratio.
D) Working capital ratio.

E) None of the above
F) A) and C)

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Nonrecurring items such as a loss from discontinued operations is reported on the income statement:


A) net of income tax.
B) before income tax expense.
C) below the net income line.
D) Nonrecurring items are not subject to income taxes;therefore,they are not reported on the income statement.

E) A) and D)
F) B) and D)

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Significant differences between GAAP and IFRS exist in all of the following areas except:


A) classification of preferred stock.
B) allowability of LIFO for inventory costing.
C) depreciation of equipment.
D) the order in which current and noncurrent accounts are presented on the balance sheet.

E) B) and C)
F) A) and C)

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Which of the following is closest to the company's debt-to-assets ratio for 2014?


A) 0.39
B) 0.61
C) 0.35
D) 0

E) A) and B)
F) A) and C)

Correct Answer

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Benchmarks are required to evaluate a company's performance.

A) True
B) False

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Which of the following ratios is used to evaluate solvency?


A) Earnings per share.
B) Fixed asset turnover.
C) Debt-to-assets.
D) Quick ratio.

E) B) and C)
F) None of the above

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Use the information above to answer the following question.Which of the following is closest to the company's current ratio for 2015?


A) 2.22
B) 2.26
C) 2.57
D) 6.0

E) A) and B)
F) A) and D)

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Which of the following is calculated by dividing cost of goods sold by average inventory and then dividing this result into 365 days?


A) Inventory turnover.
B) Current ratio.
C) Days to collect ratio.
D) Days to sell ratio.

E) A) and C)
F) All of the above

Correct Answer

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Which of the following types of items would you be most likely to see below the income tax expense line on an income statement prepared in 2014?


A) Gain on Sale of Discontinued Operations,Net of Tax
B) Gross Profit
C) Cumulative Effect of Accounting Change
D) Salaries Expense

E) A) and B)
F) C) and D)

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A

The asset turnover ratio is a profitability ratio.

A) True
B) False

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Showing 1 - 20 of 147

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