| Question 1 | 5 / 5 points |
The notes to the financial statements related to pension accounting will reveal:
Question options:
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| a description of undefined benefit pension plans. | ||
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| a schedule reconciling the funded status of the plan with amounts reported in the firm's balance sheet. | ||
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| the service cost associated with the firm's defined contribution plan. | ||
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| the interest cost associated with the firm's defined contribution plan. | ||
| Question 2 | 5 / 5 points | ||
What is important to understand about the label "pro forma"?
Question options:
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| Pro forma refers to GAAP-based financial statements. | ||
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| Pro forma requires firms to present two distinct net profit amounts in their Form 10-Ks. | ||
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| Pro forma relates to the amount of debt in a firm's capital structure. | ||
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| Pro forma earnings or financial statements are sometimes based on a firm's own definition which is not technically a correct definition. | ||
| Question 3 | 5 / 5 points | ||
The __________ shows the relationship between cash dividends and market price.
Question options:
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| market yield | ||
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| earnings yield | ||
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| share yield | ||
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| dividend yield | ||
| Question 4 | 5 / 5 points | ||
What does a financial leverage index greater than one indicate about a firm?
Question options:
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| Return on assets exceeds the return on equity. | ||
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| Return on equity exceeds the return on assets. | ||
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| The firm is not employing debt successfully. | ||
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| The firm does not generate enough funds to cover interest payments. | ||
| Question 5 | 5 / 5 points | ||
Use the following selected financial information for Wilcox Corporation to answer the question below.
Wilcox's total asset turnover ratio is:
Question options:
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| 3.98. | ||
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| 4.22. | ||
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| 5.91. | ||
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| 3.34. | ||
| Question 6 | 5 / 5 points | ||
All of the following items should be assessed when considering the quality of the sales number, EXCEPT which one?
Question options:
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| Gross vs. net basis | ||
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| Vendor financing | ||
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| Gains from sale of assets | ||
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| Real vs. nominal growth | ||
| Question 7 | 5 / 5 points | ||
__________ financial statements are projections of financial statements based on a set of assumptions regarding future revenues, expenses, level of investments in assets, financing methods and costs, and working capital management.
Question options:
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| Income | ||
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| Summary | ||
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| Pro forma | ||
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| Balance sheet | ||
| Question 8 | 5 / 5 points | ||
Which of the following items would be considered low quality of financial reporting?
Question options:
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| Maintaining research and development expenses even if the economy is in a downturn and the net earnings number will be lower as a result | ||
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| Revealing the poor financial condition of a customer that may file for bankruptcy | ||
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| Using an accelerated method of depreciation for vehicles | ||
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| Reducing advertising expenses at a beverage company so that higher earnings are reported | ||
| Question 9 | 5 / 5 points | ||
The __________ cycle or __________ cycle is the normal operating cycle of a firm that consists of buying or manufacturing inventory, selling inventory and paying accounts payable and collecting accounts receivable.
Question options:
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| cash conversion; net trade | ||
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| cash conversion; fair market trade | ||
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| inventory conversion; net trade | ||
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| inventory conversion; fair market trade | ||
| Question 10 | 5 / 5 points | ||
Which group of people would be the most concerned about the operating areas that have contributed to the success of the firm and which have not?
Question options:
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| Customers | ||
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| Management | ||
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| Auditors | ||
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| Creditors | ||
| Question 11 | 5 / 5 points | ||
What does a low asset turnover compared to the industry imply?
Question options:
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| The investment in assets may be too high. | ||
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| Sales are higher than average. | ||
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| The investment in assets is too low. | ||
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| Net income is low relative to the investment in assets. | ||
| Question 12 | 5 / 5 points | ||
The following categories of ratios are used in financial statement analysis:
Liquidity, Operating efficiency (also referred to as Activity), Leverage, Profitability, and Market Measures
Classify the following ratios according to these categories.
Question options:
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| Times interest earned – market measures; net profit margin - profitability | ||
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| Times interest earned – market measures; net profit margin – operating efficiency | ||
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| Times interest earned - leverage; net profit margin - profitability | ||
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| Times interest earned - leverage; net profit margin – operating efficiency | ||
| Question 13 | 5 / 5 points | ||
Use the following selected financial information for Wilcox Corporation to answer the question below.
Wilcox's effective tax rate is:
Question options:
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| 24.67%. | ||
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| 27.36%. | ||
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| 35.00%. | ||
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| 35.56%. | ||
| Question 14 | 5 / 5 points | ||
Use the following selected financial information for Wilcox Corporation to answer the question below.
Wilcox's average collection period is:
Question options:
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| 5 days. | ||
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| 9 days. | ||
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| 13 days. | ||
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| 15 days. | ||
| Question 15 | 5 / 5 points | ||
Assessing the allowance for doubtful accounts should include all of the following EXCEPT:
Question options:
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| checking to see if the growth rates of sales, accounts receivable and the allowance for doubtful accounts have moved the exact same percentage and the exact same direction. | ||
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| calculating growth rates for sales. | ||
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| reading the notes and the management discussion and analysis. | ||
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| calculate accounts receivable and the allowance for doubtful accounts. | ||
| Question 16 | 5 / 5 points | ||
Use the following selected financial information for Wilcox Corporation to answer the question below.
Wilcox's cash flow adequacy ratio is:
Question options:
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| 1.43. | ||
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| 2.15. | ||
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| 1.90. | ||
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| 0.54. | ||
| Question 17 | 5 / 5 points | ||
What is the importance of equity income to the analyst?
Question options:
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| Equity income includes the cash dividends a firm pays. | ||
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| Equity income is taxed at a higher tax rate than normal earnings. | ||
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| Equity income is income that is not received in cash. | ||
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| Equity income is an extraordinary item. | ||
| Question 18 | 5 / 5 points | ||
Which of the following assets CANNOT be impaired?
Question options:
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| Inventories | ||
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| Goodwill | ||
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| Pension liabilities | ||
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| Property, plant and equipment | ||
| Question 19 | 5 / 5 points | ||
The __________ helps the analyst see how the firm's decisions and activities over the course of an accounting period interact to produce an overall return to the firm's shareholders, the return on equity.
Question options:
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| Du Pont System | ||
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| Du Shane System | ||
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| Van Pont System | ||
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| Harding System | ||
| Question 20 | 5 / 5 points | ||
The following categories of ratios are used in financial statement analysis:
Liquidity, Operating Efficiency (also referred to as Activity), Leverage, Profitability, and Market Measures
Classify the following ratios according to these categories.
Question options:
|
| Cash flow margin - liquidity; days inventory held - profitability |
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| Cash flow margin - liquidity; days inventory held - leverage |
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| Cash flow margin - profitability; days inventory held - leverage |
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| Cash flow margin - profitability; days inventory held - liquidity |
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