Chapter 14: Financial Statement and Ratio Analysis

Descrição

Quiz sobre Chapter 14: Financial Statement and Ratio Analysis, criado por rainierdeocampo em 26-09-2015.
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Quiz por rainierdeocampo, atualizado more than 1 year ago
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Criado por rainierdeocampo quase 9 anos atrás
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Resumo de Recurso

Questão 1

Questão
The assets on the balance sheet produce the income of the firm.
Responda
  • True
  • False

Questão 2

Questão
In common-sized financial statements each item is expressed as either a percentage of total assets or total liabilities.
Responda
  • True
  • False

Questão 3

Questão
The greater the debt ratio, the less risky a firm is.
Responda
  • True
  • False

Questão 4

Questão
In general, a firm's inventory is its most liquid possession.
Responda
  • True
  • False

Questão 5

Questão
Gary's Garage has an inventory turnover ratio that is twice the industry's ratio. It is safe to assume Gary's Garage is a profitable firm.
Responda
  • True
  • False

Questão 6

Questão
When ratios of differing years are being compared, inflation should be taken into consideration.
Responda
  • True
  • False

Questão 7

Questão
If the net working capital is negative, current liabilities exceed current assets.
Responda
  • True
  • False

Questão 8

Questão
The accounts receivable turnover ratio is often called the days sales in receivables.
Responda
  • True
  • False

Questão 9

Questão
A P/E ratio of 30 indicates that investors are willing to pay $30 for each $1 of earnings.
Responda
  • True
  • False

Questão 10

Questão
When referring to ratio comparisons, time-series analysis compares a firm to that (word?) industry leader.
Responda
  • True
  • False

Questão 11

Questão
The liquidity of a business firm refers to the solvency of the firm's overall financial position.
Responda
  • True
  • False

Questão 12

Questão
Total assets turnover commonly measures the liquidity of a firm's total assets.
Responda
  • True
  • False

Questão 13

Questão
The less fixed-cost debt, or financial leverage, a firm uses, the greater will be its risk and return.
Responda
  • True
  • False

Questão 14

Questão
The average age of inventory is viewed as the average length of time inventory is held by the firm or as the average number of days' sales inventory.
Responda
  • True
  • False

Questão 15

Questão
Both present and prospective shareholders are intersected in the firm's current and future level of risk and return. These two dimensions directly affect share price.
Responda
  • True
  • False

Questão 16

Questão
If Lacey Corporation has total shares of $750,000, one-half of which are credit sales. If the balance sheet reports accounts receivable of $52,369, what is Lacey's average collection period?
Responda
  • a) 50 days
  • b) 35 days
  • c) 182 days
  • d) not enough information

Questão 17

Questão
A firm's fixed assets are termed as its ________ assets.
Responda
  • a) earning
  • b) equity
  • c) short-term
  • d) variable

Questão 18

Questão
_______________ refers to the solvency of the firm's overall financial position, the ease with which it can pay bills.
Responda
  • a) Coverage
  • b) Leverage
  • c) Liquidity
  • d) Turnover

Questão 19

Questão
_________ ratios measure the ability to convert assets to cash
Responda
  • a) Liquidity
  • b) Management
  • c) Profitability
  • d) Activity

Questão 20

Questão
Terry's Tire Company has earnings before taxes of $1.43 million. It has 275,000 of common stock outstanding. The tax rate is 40$. What is Terry's EPS?
Responda
  • a) $5.20
  • b) $3.12
  • c) $2.08
  • d) $3.25

Questão 21

Questão
The _________ ratio measures the firm's ability to meet interest payments.
Responda
  • a) times interest earned
  • b) debt ratio
  • c) debt-equity
  • d) quick ratio

Questão 22

Questão
Sales are $3 million and total asset turner is 1.70. What are the firm's total assets?
Responda
  • a) $2,500,000
  • b) $2,142,857
  • c) $1,764,706
  • d) $1,875,000

Questão 23

Questão
The Du Pont Analysis allows firms to break their return on equity down into all of the following except:
Responda
  • a) use of leverage
  • b) inventory usage
  • c) efficiency of asset usage
  • d) net profit in sales

Questão 24

Questão
In 1998, sales were $363,000 with a gross margin of $64,000. On January 1, the firm had $107,000 in inventory and $36,000 on December 31. What is the firm's inventory turnover?
Responda
  • a) 3.39
  • b) 4.18
  • c) .90
  • d) 5.08

Questão 25

Questão
All of the following should be used to analyze a firm except:
Responda
  • a) Perform a trend analysis
  • b) Analyze a firm's ratios with competitors
  • c) Perform a terminal cash flow
  • d) Analyze a firm's strengths and weaknesses

Questão 26

Questão
Ratio provide a ________ measure of a company's performance and condition.
Responda
  • a) definitive
  • b) gross
  • c) relative
  • d) qualitative

Questão 27

Questão
Pne means to negate the effect of inflation on ratio analysis is to value the fixed assets at:
Responda
  • a) book value
  • b) liquidation value
  • c) replacement value
  • d) depreciation

Questão 28

Questão
The _________ ratio provides the information critical to the long-run operation of the firm.
Responda
  • a) liquidity
  • b) activity
  • c) debt
  • d) profitability

Questão 29

Questão
A decrease in total asset turnover will result in _____________ in the return on equity.
Responda
  • a) an increase
  • b) no change
  • c) a decrease
  • d) an undetermined change

Questão 30

Questão
______________ is used by financial managers as a structure of dissecting the firm's financial statements to assess its financial condition.
Responda
  • a) Statement of Cash Flow
  • b) Common-size income statement
  • c) The Du Pont system of analysis
  • d) Cross-sectional analysis

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