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What is the gross profit percentage for the current year?


A) 24%
B) 76%
C) 60%
D) 31%

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

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The going-concern assumption states that the:


A) company will always maximize the profit for stockholders.
B) company is not expected to go out of business in the near future.
C) company is a separate concern from the stockholders.
D) company's results will be reported in a consistent manner from period to period.

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

Correct Answer

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How competitors calculate depreciation is most likely to affect comparisons between competitors if property, plant and equipment:


A) makes up a large percentage of assets and average useful lives are fairly different.
B) makes up a small percentage of assets and assets are financed in a different way.
C) makes up a small percentage of assets and average useful lives are fairly similar.
D) is primarily leased in the industry, not purchased.

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

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If a company generates $3.15 in operating cash flows for every $1 of net income, then the company's:


A) capital acquisition ratio is 3.15.
B) net profit margin is 3.15.
C) return on equity is 3.15.
D) quality of income ratio is 3.15.

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

Correct Answer

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What of the following would be shown on B.Darin's horizontal analysis when calculating percentage changes from 2010 to 2011?


A) An increase in sales revenue of 23%.
B) An increase in gross profit of 41.5%.
C) An increase in interest expense of 100%.
D) An increase in net income of 57%.

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

Correct Answer

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If net income for 2012 is $120,000, what is the return on equity ratio for 2012?


A) 20%
B) 14.5%
C) 15.7%
D) 13.3%

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

Correct Answer

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The earnings per share at December 31, 2012 is


A) $100
B) $400
C) $40
D) $500

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

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Vertical analysis is the comparison of a company's financial information over time.

A) True
B) False

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Company X has net sales revenue of $1,250,000, cost of goods sold of $760,000, and all other expenses of $290,000. The beginning balance of stockholders' equity is $400,000 and the beginning balance of fixed assets Is $361,000. The ending balance of stockholders' equity is $600,000 and the ending balance of fixed assets is $389,000. What is the fixed asset turnover ratio?


A) 0.53
B) 2.50
C) 3.33
D) 0.80

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

Correct Answer

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Which of the following analysis techniques does not examine significant sustained changes over time?


A) Trend analysis
B) Horizontal analysis
C) Time-series analysis
D) Vertical analysis

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

Correct Answer

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


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

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

Correct Answer

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Which of the following is a liquidity ratio?


A) Inventory turnover.
B) Quality of income.
C) Net profit margin.
D) Times interest earned.

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

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A company has a current ratio of 2.0 and a quick ratio of 1.5. Assume the company then paid previously declared dividends in the amount of $20,000. Which of the following statements is true?


A) The current ratio will decrease and the quick ratio will decrease.
B) The current ratio will decrease and the quick ratio will not change.
C) The current ratio and the quick ratio will not change.
D) The current ratio will increase and the quick ratio will increase.

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

Correct Answer

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A Times Interest Earned ratio of 11 means that the company's:


A) net income is large enough to pay interest and taxes 11 times.
B) net cash flow from operations before taxes and interest is large enough to pay interest and taxes 11 times.
C) net cash flow from operations is large enough to pay interest and taxes 11 times.
D) income before taxes and interest is large enough to pay interest 11 times.

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

Correct Answer

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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) None of the above
F) A) and D)

Correct Answer

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Judging only from the ratios below, which of the following clothing wholesalers is least likely to be having cash flow problems? Judging only from the ratios below, which of the following clothing wholesalers is least likely to be having cash flow problems? A) Company A B) Company B C) Company C D) Company D


A) Company A
B) Company B
C) Company C
D) Company D

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

Correct Answer

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Compute the capital acquisitions ratio.


A) 12.14
B) 5.71
C) 2.86
D) 8.57

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

Correct Answer

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In a common size balance sheet, each asset on the balance sheet is expressed as a percentage of:


A) Total assets
B) Total liabilities
C) Net income
D) Total stockholders' equity

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

Correct Answer

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The debt-to-assets ratio is the:


A) ratio of current liabilities to current assets.
B) ratio of long term liabilities to fixed assets.
C) ratio of total liabilities to total assets.
D) proportion of short-term liabilities to total liabilities. Debt to assets ratio = Total liabilities/Total assets.

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

Correct Answer

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A decrease in accounts receivable turnover ratio is indicative of:


A) an increase in sales revenue.
B) slower selling inventory.
C) an increase in accounts receivable.
D) a decline in cost of good sold.

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

Correct Answer

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Showing 21 - 40 of 143

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