Question 1

A Halifax ﬁrm generates net income of $530. The depreciation expense is $60 and dividends paid are $80. Accounts payable decrease by $40, accounts receivable decrease by $30, inventory Increases by $20, and net ﬁxed assets decrease by $40. What is the net cash from operating
Activity?

Accepted Answer

A)   $480
B)   $530
C)   $560
D)   $580
E)   $600F) B) and E)
G) B) and C)

Question 2

The Frasier Company has a long-term debt ratio of 0.5 and a current ratio of 1.3. Current liabilities are $900, sales are $6,000, proﬁt margin is 10%, and ROE is 19&. What is the amount of the ﬁrm's Net ﬁxed assets?

Accepted Answer

A)   $7,546
B)   $7,046
C)   $6,556
D)   $6,046
E)   $5,556F) B) and E)
G) None of the above

Question 3

A common-size statement of comprehensive income is deﬁned as a ﬁnancial statement wherein all items are expressed as a percentage of:

Accepted Answer

A)   Their prior year's value.
B)   Their projected value.
C)   Their 5-year average value.
D)   Total assets.
E)   Sales.F) A) and C)
G) None of the above

Question 4

What was inventory turnover for 2015?

Accepted Answer

A)   1.38
B)   1.42
C)   1.48
D)   3.15
E)   3.38F) A) and B)
G) A) and C)

Question 5

Determine the value of cash equivalents given the following information: cash ratio = 2.5; cash = $1,500 ; current liabilities = $900

Accepted Answer

A)   $850
B)   $800
C)   $750
D)   $700
E)   $650F) B) and D)
G) None of the above

Question 6

Conceptually, what does the days' sales in receivables ratio measure for a ﬁrm?

Accepted Answer

A)   The number of days it takes to generate dollar sales equal to the outstanding accounts receivable balance.
B)   The number of days it takes on average for customers to pay their bills.
C)   The number of days it takes for a ﬁrm to pay its bills assuming no new payables are created.
D)   The number of times during the year a ﬁrm collects and relends its receivables.
E)   The number of days it takes before the ﬁrm's working capital becomes negative.F) A) and E)
G) A) and B)

Question 7

Bandras Company has a debt-equity ratio of 0.85. Return on assets is 10.5 %. What is the return on equity?

Accepted Answer

A)   17.88%
B)   18.35%
C)   18.88%.
D)   19.43%
E)   19.85%F) B) and D)
G) B) and C)

Question 8

The total long-term debt and equity of the ﬁrm is frequently called:

Accepted Answer

A)   Total assets.
B)   Total capitalization.
C)   Total ﬁnancing.
D)   Debt-equity consolidation.
E)   Debt-equity reconciliation.F) C) and D)
G) B) and E)

Question 9

Which one of the following will increase the return on equity as computed using the Du Pont identity given that all else is held constant?

Accepted Answer

A)   A decrease in total equity
B)   A decrease in sales
C)   A decrease in net income
D)   An increase in total assets
E)   An increase in costsF) None of the above
G) B) and E)

Question 10

The quick ratio:

Accepted Answer

A)   Indicates the ability of a ﬁrm to meet its current obligations without disposing of any inventory.
B)   Depicts the ability of a ﬁrm to pay off its long-term debts in a timely manner.
C)   Compares the current cash holdings of a ﬁrm to the current liabilities.
D)   Measures a ﬁrm's ability to generate cash from its operations.
E)   Indicates how quickly a ﬁrm can liquidate its inventory.F) A) and D)
G) A) and C)

Question 11

Use the following statement of ﬁnancial position and statement of comprehensive income   What is the net working capital to total assets ratio for Bluebird for 2015?

Accepted Answer

A)   28.17 %
B)   34.18 %
C)   39.27 %
D)   46.11 %
E)   47.15 %F) A) and B)
G) B) and E)

Question 12

The following statement of ﬁnancial position and statement of comprehensive income should be used.    What is Woodburn's total debt ratio for 2015?

Accepted Answer

A)   23.45 %
B)   29.01 %
C)   35.42 %
D)   40.54 %
E)   43.09 %F) None of the above
G) B) and E)

Question 13

The uses of cash include($ in millions) :

Accepted Answer

A)   $110 from notes payable.
B)   $1,075 from retained earnings.
C)   $840 from ﬁxed assets.
D)   $370 from inventory.
E)   $70 from accounts receivable.F) A) and D)
G) C) and D)

Question 14

An increase in long-term debt is source of cash?

Accepted Answer

A) True 
 B)False

Question 15

Without making reference to its formula, provide a deﬁnition of accounts receivable turnover.

Accepted Answer

A ratio used to examine the ef...

Question 16

Problems with ﬁnancial statement analysis include all of the following EXCEPT:

Accepted Answer

A)   Many ﬁrms are conglomerates whose combined operations don't ﬁt any neat industry classiﬁcation.
B)   The ﬁnancial statements of ﬁrms outside US and Canada do not necessarily conform to GAAP, making it diﬃcult to compare them to US and Canadian ﬁrms.
C)   Firms may use different accounting procedures for inventory, making it diﬃcult to compare those using standard ﬁnancial ratios.
D)   If two ﬁrms with seasonal operations end their ﬁscal years at different times, their ﬁnancial statements may be diﬃcult to compare.
E)   Financial statements have little value since they cannot be used to calculate a ﬁrm's tax liability.F) All of the above
G) C) and D)

Question 17

Prepare common-size statement of ﬁnancial positions for Marble Comics using the data below.
Comment on the ﬁrm's liquidity.

Accepted Answer

This is a relatively straightforward exe...

Question 18

Ajax Corporation's total current assets are valued at $135,000 and are comprised of cash, accounts receivable and inventory. Determine the value of the cash account given the following information:
Sales = $800,000; cost of goods sold = $300,000; accounts receivable turnover = 32 times;
Inventory turnover = 10 times.

Accepted Answer

A)   $70,000
B)   $75,000
C)   $80,000
D)   $85,000
E)   $90,000F) A) and B)
G) A) and C)

Question 19

It is often said that anyone with a pencil can calculate ﬁnancial ratios, but it takes a brain to interpret
them. What kinds of things should the analyst keep in mind when evaluating the ﬁnancial
statements of a given ﬁrm?

Accepted Answer

This question is open-ended, a...

Question 20

Taylor's Men's Wear has a debt-equity ratio of 55 %, sales of $587,000, net income of $63,400, and total debt of $196,000. What is the return on equity?

Accepted Answer

A)   15.80 %
B)   17.79 %
C)   18.03 %
D)   19.41 %
E)   19.58 %F) C) and E)
G) B) and E)

Exam 3: Working With Financial Statements

A common-size statement of comprehensive income is deﬁned as a ﬁnancial statement wherein all items are expressed as a percentage of:

Correct Answer
verified

Determine the value of cash equivalents given the following information: cash ratio = 2.5; cash = $1,500 ; current liabilities = $900

Correct Answer
verified

The total long-term debt and equity of the ﬁrm is frequently called:

Correct Answer
verified

The uses of cash include($ in millions) :

Correct Answer
verified

Bandras Company has a debt-equity ratio of 0.85. Return on assets is 10.5 %. What is the return on equity?

Correct Answer
verified

Taylor's Men's Wear has a debt-equity ratio of 55 %, sales of $587,000, net income of $63,400, and total debt of $196,000. What is the return on equity?

Correct Answer
verified

Which one of the following will increase the return on equity as computed using the Du Pont identity given that all else is held constant?

Correct Answer
verified

The following statement of ﬁnancial position and statement of comprehensive income should be used. What is Woodburn's total debt ratio for 2015?

Correct Answer
verified

A Halifax ﬁrm generates net income of $530. The depreciation expense is $60 and dividends paid are $80. Accounts payable decrease by $40, accounts receivable decrease by $30, inventory Increases by $20, and net ﬁxed assets decrease by $40. What is the net cash from operating Activity?

Correct Answer
verified

Use the following statement of ﬁnancial position and statement of comprehensive income What is the net working capital to total assets ratio for Bluebird for 2015?

Correct Answer
verified

Conceptually, what does the days' sales in receivables ratio measure for a ﬁrm?

Correct Answer
verified

An increase in long-term debt is source of cash?

Correct Answer
verified

It is often said that anyone with a pencil can calculate ﬁnancial ratios, but it takes a brain to interpret them. What kinds of things should the analyst keep in mind when evaluating the ﬁnancial statements of a given ﬁrm?

Correct Answer
verified
This question is open-ended, a...
View Answer

The quick ratio:

Correct Answer
verified

Problems with ﬁnancial statement analysis include all of the following EXCEPT:

Correct Answer
verified

Without making reference to its formula, provide a deﬁnition of accounts receivable turnover.

Correct Answer
verified
A ratio used to examine the ef...
View Answer

What was inventory turnover for 2015?

Correct Answer
verified

Correct Answer
verified

The Frasier Company has a long-term debt ratio of 0.5 and a current ratio of 1.3. Current liabilities are $900, sales are $6,000, proﬁt margin is 10%, and ROE is 19&. What is the amount of the ﬁrm's Net ﬁxed assets?

Correct Answer
verified

Prepare common-size statement of ﬁnancial positions for Marble Comics using the data below. Comment on the ﬁrm's liquidity.

Correct Answer
verified
This is a relatively straightforward exe...
View Answer

Exam 3: Working With Financial Statements

A common-size statement of comprehensive income is deﬁned as a ﬁnancial statement wherein all items are expressed as a percentage of:

Correct AnswerverifiedShow Answer

Determine the value of cash equivalents given the following information: cash ratio = 2.5; cash = $1,500 ; current liabilities = $900

Correct AnswerverifiedShow Answer

The total long-term debt and equity of the ﬁrm is frequently called:

Correct AnswerverifiedShow Answer

The uses of cash include($ in millions) :

Correct AnswerverifiedShow Answer

Bandras Company has a debt-equity ratio of 0.85. Return on assets is 10.5 %. What is the return on equity?

Correct AnswerverifiedShow Answer

Taylor's Men's Wear has a debt-equity ratio of 55 %, sales of $587,000, net income of $63,400, and total debt of $196,000. What is the return on equity?

Correct AnswerverifiedShow Answer

Which one of the following will increase the return on equity as computed using the Du Pont identity given that all else is held constant?

Correct AnswerverifiedShow Answer

The following statement of ﬁnancial position and statement of comprehensive income should be used. What is Woodburn's total debt ratio for 2015?

Correct AnswerverifiedShow Answer

A Halifax ﬁrm generates net income of $530. The depreciation expense is $60 and dividends paid are $80. Accounts payable decrease by $40, accounts receivable decrease by $30, inventory Increases by $20, and net ﬁxed assets decrease by $40. What is the net cash from operating Activity?

Correct AnswerverifiedShow Answer

Use the following statement of ﬁnancial position and statement of comprehensive income What is the net working capital to total assets ratio for Bluebird for 2015?

Correct AnswerverifiedShow Answer

Conceptually, what does the days' sales in receivables ratio measure for a ﬁrm?

Correct AnswerverifiedShow Answer

An increase in long-term debt is source of cash?

Correct AnswerverifiedShow Answer

It is often said that anyone with a pencil can calculate ﬁnancial ratios, but it takes a brain to interpret them. What kinds of things should the analyst keep in mind when evaluating the ﬁnancial statements of a given ﬁrm?

Correct AnswerverifiedThis question is open-ended, a...View AnswerShow Answer

The quick ratio:

Correct AnswerverifiedShow Answer

Problems with ﬁnancial statement analysis include all of the following EXCEPT:

Correct AnswerverifiedShow Answer

Without making reference to its formula, provide a deﬁnition of accounts receivable turnover.

Correct AnswerverifiedA ratio used to examine the ef...View AnswerShow Answer

What was inventory turnover for 2015?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Frasier Company has a long-term debt ratio of 0.5 and a current ratio of 1.3. Current liabilities are $900, sales are $6,000, proﬁt margin is 10%, and ROE is 19&. What is the amount of the ﬁrm's Net ﬁxed assets?

Correct AnswerverifiedShow Answer

Prepare common-size statement of ﬁnancial positions for Marble Comics using the data below. Comment on the ﬁrm's liquidity.

Correct AnswerverifiedThis is a relatively straightforward exe...View AnswerShow Answer

Correct Answer
verified

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verified
This question is open-ended, a...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A ratio used to examine the ef...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified
This is a relatively straightforward exe...
View Answer