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Exam 13: Measuring and Evaluating Financial Performance

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Question 1

Multiple Choice

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Which of the following will not improve a company's gross profit percentage?

A) An increase in the sales price
B) A decrease in the cost of inventory
C) A decrease in the shipping cost for merchandise purchased
D) Collecting cash from customers in advance

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

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D

Question 2

Multiple Choice

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Which of the following could indicate bad news?

A) An increase in fixed asset turnover ratio
B) A decrease in days to sell
C) A decrease in EPS
D) A decrease in the debt-to-assets ratio

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

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Question 3

Multiple Choice

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Assume the following sales data for a company: By what percentage did sales differ between Years 1 and 2 and Years 2 and 3,respectively?

If an analyst wanted to assess a company's long-run survival,which of the following categories of ratios would most likely be used?

The objectives of both IFRS and US GAAP objectives are to provide information that is:

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.The fixed asset turnover ratio is closest to:

Horizontal analysis:

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

The following information comes from the balance sheets and income statements of the Rocket Company: What is the times interest earned ratio for the current year?

Judging only from the ratios below,which of the following clothing wholesalers is least likely to be having cash flow problems?

Net income was $418,600 in the current year and $364,000 in the prior year.The year-to-year percentage change in net income is closest to:

The general goal of horizontal analyses is to identify significant trends.

The going-concern assumption is also known as the continuity assumption.

If cost of goods sold remains unchanged,an increase in the inventory turnover ratio is indicative of a(n) :

The primary objective of financial accounting and reporting is to provide:

Which of the following is calculated by dividing net revenue by average net fixed assets?

The following information is taken from the financial statements of B.Darin Company: Expenses include interest of $10,000 and income tax of $90,000.There was an average of 40,000 shares of common stock outstanding during the year and the market price of the stock is $15 per share at the end of the year.There was no preferred stock outstanding during the year. Required: Calculate the following ratios for the current year: Part a.Fixed asset turnover Part b.Return on equity (ROE) Part c.Earnings per share (EPS) Part d.Times interest earned Part e.Price/Earnings ratio Part f.Debt-to-assets ratio?Part g.Net profit margin

Another term for historical cost is:

Which of the following ratios is used to evaluate solvency?

On a common size balance sheet what is the percentage that would be shown next to the dollar amount of current assets?