Question 1

Earnings per share represents how much

Accepted Answer

A)  of a company's current net income has been distributed for each share of stock held by an investor.
B)  of a company's current net income can be distributed for each share of stock held by an investor.
C)  of a company's contribution margin is available to be distributed to each stockholder.
D)  gross profit of a company can be distributed for each share of stock held by an investor.E) C) and D)
F) A) and C)

Question 2

Numerous resources are available to assist in developing an understanding of a company's competitive environment.The U.S.Census Bureau collects a wide array of statistics and makes them available through which of the following sites?

Accepted Answer

A)  HYPERLINK "http://www.census.gov/" http://www.census.gov/
B)  HYPERLINK "http://www.stats.com/" http://www.stats.com/
C)  HYPERLINK "http://www.census.com" http://www.census.com/
D)  HYPERLINK "http://www.statistics.gov" http://www.statistics.gov/E) B) and C)
F) None of the above

Question 3

The return on assets ratio measures how well

Accepted Answer

A)  current assets are used to provide cash for the purchase of long-term assets.
B)  a company's assets create sales revenue.
C)  a company manages its assets.
D)  assets have been employed in conducting the business.E) A) and C)
F) A) and D)

Question 4

A note of caution in interpreting the debt ratio is that

Accepted Answer

A)  all debt decreases liquidity ratios.
B)  financing arrangements, such as leases, may be off-balance sheet arrangement and not be classified as debt on the balance sheet.
C)  financing arrangements, such as leases, may be classified as debt when in fact they do not require interest payments.
D)  long-term debt may be inflated because of a desire to reduce the current ratio.E) B) and C)
F) None of the above

Question 5

Which of the following is the formula for calculating the percentage change in the horizontal analysis of a financial statement?

Accepted Answer

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

Question 6

Dun and Bradstreet's Industry Norms and Key Business Ratios and the Almanac of Business and Industrial Financial Ratios are two publications relevant to managers interested in understanding a company's performance relative to its competitors.
Required:
a.What is the meaning of SIC and NAICS?
b.Explain how the SIC and NAICS codes were developed.

Accepted Answer

a.SIC is the Standard Industrial Classif...

Question 7

The 2021 and 2022 balance sheets for Ottoman Manufacturing Company appear below:  What is the debt ratio for 2022?

Accepted Answer

A)  39.2%
B)  61.4%
C)  68.6%
D)  100%E) B) and D)
F) B) and C)

Question 8

Another term for vertical analysis is

Accepted Answer

A)  common-size analysis.
B)  liquidity analysis.
C)  horizontal analysis.
D)  leverage analysis.E) B) and C)
F) B) and D)

Question 9

The calculations are the easy part of a horizontal analysis, the challenge is

Accepted Answer

A)  gathering the data.
B)  interpreting the results.
C)  determining the data.
D)  finding a use for the data.E) B) and D)
F) None of the above

Question 10

The 2020 and 2021 partial balance sheets for Ottoman Industries are shown below.  Calculate Ottoman's working capital for 2021.

Accepted Answer

A)  $26,000
B)  $36,000
C)  1.65
D)  1.53E) A) and B)
F) B) and C)

Question 11

Foreman Outfitters, a retail store of camping supplies, has sales of $300,000 and cost of goods sold of $210,000.Beginning inventory was $20,000 and ending inventory was $12,000.What is the company's average days to sell inventory?

Accepted Answer

$210,000 ÷ [($20,000 + 12,000) ÷ 2] = 13.125
365 days ÷ 13.125 = 27.81 days

Question 12

The formula for the return on assets is

Accepted Answer

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

Question 13

Which of the following is not a use of trend analysis?

Accepted Answer

A)  For revealing more information about performance than is revealed by just one year's worth of change
B)  For comparing changes in related accounts
C)  For analyzing information other than that found on the balance sheet and income statement, such as supplemental information reported in annual reports
D)  For comparing changes in unrelated accountsE) B) and C)
F) A) and C)

Question 14

When will the price/earnings ratio change?

Accepted Answer

A)  At the end of each year
B)  Every time dividends are paid
C)  Every time a share of stock is traded
D)  Every time the stock price changesE) A) and B)
F) A) and C) D

Question 15

M&M Manufacturing has provided the following comparative income statements:  Required:
Prepare a horizontal analysis of M&M's 2022 income statement.

Accepted Answer

The answer of M&M Manufacturing has provided the following comparative...

Question 16

Which of the following will probably not be a result if a company's liquidity is poor?

Accepted Answer

A)  Workers will quit if they are not paid on time.
B)  Debt and/or equity will exceed the company's maximum allowed amount.
C)  Banks may not loan the company funds.
D)  Customers will seek other sources of goods when the company's product is not available.E) A) and D)
F) A) and B)

Question 17

Which of the following is not a use of trend analysis?

Accepted Answer

A)  For revealing more information about performance than is revealed by just one year's worth of change
B)  For comparing changes in related accounts
C)  To measure liquidity
D)  For analyzing information other that found on the balance sheet and income statement, such as supplemental information reported in annual reportsE) B) and D)
F) B) and C)

Question 18

A helpful approach in examining changes in the relative size of account balances within a single statement is referred to as

Accepted Answer

A)  common-size analysis and trend analysis.
B)  vertical analysis and horizontal analysis.
C)  trend analysis and horizontal analysis.
D)  common-size analysis and vertical analysis.E) A) and B)
F) A) and C)

Question 19

On a common-size balance sheet, notes payable is shown as a percentage of

Accepted Answer

A)  total liabilities.
B)  current liabilities.
C)  total assets.
D)  total stockholders' equity.E) A) and D)
F) All of the above

Question 20

Which of the following measures how much of earnings per share is returned to common stockholders in the form of dividends?

Accepted Answer

A)  Earnings per share
B)  Dividend payout ratio
C)  Price/earnings ratio
D)  Return on assetsE) A) and D)
F) C) and D)

Exam 12: Performance Evaluation Revisited: a Balanced Approach

Earnings per share represents how much

Correct Answer
verified

Numerous resources are available to assist in developing an understanding of a company's competitive environment.The U.S.Census Bureau collects a wide array of statistics and makes them available through which of the following sites?

Correct Answer
verified

The return on assets ratio measures how well

Correct Answer
verified

A note of caution in interpreting the debt ratio is that

Correct Answer
verified

Which of the following is the formula for calculating the percentage change in the horizontal analysis of a financial statement?

Correct Answer
verified

Correct Answer
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a.SIC is the Standard Industrial Classif...
View Answer

The 2021 and 2022 balance sheets for Ottoman Manufacturing Company appear below: What is the debt ratio for 2022?

Correct Answer
verified

Another term for vertical analysis is

Correct Answer
verified

The calculations are the easy part of a horizontal analysis, the challenge is

Correct Answer
verified

The 2020 and 2021 partial balance sheets for Ottoman Industries are shown below. Calculate Ottoman's working capital for 2021.

Correct Answer
verified

Foreman Outfitters, a retail store of camping supplies, has sales of $300,000 and cost of goods sold of $210,000.Beginning inventory was $20,000 and ending inventory was $12,000.What is the company's average days to sell inventory?

Correct Answer
verified
$210,000 ÷ [($20,000 + 12,000) ÷ 2] = 13.125 365 days ÷ 13.125 = 27.81 days

The formula for the return on assets is

Correct Answer
verified

Which of the following is not a use of trend analysis?

Correct Answer
verified

When will the price/earnings ratio change?

Correct Answer
verified
D

M&M Manufacturing has provided the following comparative income statements: Required: Prepare a horizontal analysis of M&M's 2022 income statement.

Correct Answer
verified
11eb8721_e816_f102_883a_25e5a39c3e5b_TB8455_00

Which of the following will probably not be a result if a company's liquidity is poor?

Correct Answer
verified

Which of the following is not a use of trend analysis?

Correct Answer
verified

A helpful approach in examining changes in the relative size of account balances within a single statement is referred to as

Correct Answer
verified

On a common-size balance sheet, notes payable is shown as a percentage of

Correct Answer
verified

Which of the following measures how much of earnings per share is returned to common stockholders in the form of dividends?

Correct Answer
verified

Exam 12: Performance Evaluation Revisited: a Balanced Approach

Earnings per share represents how much

Correct AnswerverifiedShow Answer

Numerous resources are available to assist in developing an understanding of a company's competitive environment.The U.S.Census Bureau collects a wide array of statistics and makes them available through which of the following sites?

Correct AnswerverifiedShow Answer

The return on assets ratio measures how well

Correct AnswerverifiedShow Answer

A note of caution in interpreting the debt ratio is that

Correct AnswerverifiedShow Answer

Which of the following is the formula for calculating the percentage change in the horizontal analysis of a financial statement?

Correct AnswerverifiedShow Answer

Correct Answerverifieda.SIC is the Standard Industrial Classif...View AnswerShow Answer

The 2021 and 2022 balance sheets for Ottoman Manufacturing Company appear below: What is the debt ratio for 2022?

Correct AnswerverifiedShow Answer

Another term for vertical analysis is

Correct AnswerverifiedShow Answer

The calculations are the easy part of a horizontal analysis, the challenge is

Correct AnswerverifiedShow Answer

The 2020 and 2021 partial balance sheets for Ottoman Industries are shown below. Calculate Ottoman's working capital for 2021.

Correct AnswerverifiedShow Answer

Foreman Outfitters, a retail store of camping supplies, has sales of $300,000 and cost of goods sold of $210,000.Beginning inventory was $20,000 and ending inventory was $12,000.What is the company's average days to sell inventory?

Correct Answerverified$210,000 ÷ [($20,000 + 12,000) ÷ 2] = 13.125 365 days ÷ 13.125 = 27.81 days

The formula for the return on assets is

Correct AnswerverifiedShow Answer

Which of the following is not a use of trend analysis?

Correct AnswerverifiedShow Answer

When will the price/earnings ratio change?

Correct AnswerverifiedD

M&M Manufacturing has provided the following comparative income statements: Required: Prepare a horizontal analysis of M&M's 2022 income statement.

Correct Answerverified11eb8721_e816_f102_883a_25e5a39c3e5b_TB8455_00

Which of the following will probably not be a result if a company's liquidity is poor?

Correct AnswerverifiedShow Answer

Which of the following is not a use of trend analysis?

Correct AnswerverifiedShow Answer

A helpful approach in examining changes in the relative size of account balances within a single statement is referred to as

Correct AnswerverifiedShow Answer

On a common-size balance sheet, notes payable is shown as a percentage of

Correct AnswerverifiedShow Answer

Which of the following measures how much of earnings per share is returned to common stockholders in the form of dividends?

Correct AnswerverifiedShow Answer

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a.SIC is the Standard Industrial Classif...
View Answer

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$210,000 ÷ [($20,000 + 12,000) ÷ 2] = 13.125 365 days ÷ 13.125 = 27.81 days

Correct Answer
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Correct Answer
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D

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11eb8721_e816_f102_883a_25e5a39c3e5b_TB8455_00

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