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Worksheetsfinancial statement analysis
Total questions: 14
Worksheet time: 9mins
Which of the following generally is the most useful in analyzing companies of different sizes?
comparative statements
common-sized financial statements
price-level accounting
profitability index
The percent of property, plant and equipment to total assets is an example of:
vertical analysis
solvency analysis
profitability analysis
horizontal analysis
The percentage analysis of increases and decreases in individual items in comparative financial statements is called:
vertical analysis
solvency analysis
profitability analysis
horizontal analysis
Horizontal analysis is also known as
linear analysis.
vertical analysis.
trend analysis.
common size analysis.
In the near term, the important ratios that provide the information critical to the short-run operation of the firm are:
liquidity, activity, and profitability
liquidity, activity, and debt
liquidity, activity, and equity
activity, debt, and profitability
The primary concern of short-term creditors when assessing the strength of a firm is the entity’s
short-term liquidity
profitability
market price of stock
leverage
All of the following are asset utilization ratios except:
average collection period
inventory turnover
receivables turnover
return on assets
Asset turnover measures
how often a company replaces its assets.
how efficiently a company uses its assets to generate sales.
the portion of the assets that have been financed by creditors.
the overall rate of return on assets.
Current assets include all assets such as cash that are expected to be sold between one and 5 years.
True
False
Non-current liabilities are business obligations that are due within one year of a company's normal operating cycle.
True
False
Calculate the Return on Equity if the Net income is $7,009 and the shareholder’s equity is $20,316.
27.44%
41.72%
34.5%
39.42%
30.2%
Businesses are generally involved in three different kinds of activities, and one of them is financing activities. What does the activity relate to?
Relate to a company's main business: selling products or services to earn net income
Relate to the need for investing in property, plant, and equipment or expanding by making investments in other companies
Largest expense item, which reports the wholesale costs of inventory sold during the accounting period
Relate to how a company finances its assets with debt or stockholders' equity
Relate to the operating activities of a company
The gross profit margin is unchanged, but the net profit margin declined over the same period. This could have happened when
cost of goods sold increased relative to sales
The government has increased the tax rate
dividends were decreased
sales increased relative to expenses
All of above
IMT Industries has a debt-to-equity ratio of 1.6 compared with the industry average of 1.4. This indicates that the company…
has less liquidity than other firms in the industry
will not experience any difficulty with its creditors
has greater than average financial risk compared to other firms in its industry
will be viewed as having high creditworthiness
None of above
