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WorksheetsFINANCIAL STATEMENT ANALYSIS
Total questions: 20
Worksheet time: 46mins
Which of the basic financial statements is best used to answer the question, "How profitable is the business?"
Balance sheet
Statement of shareholder's equity
Income statement
Accounts receivable aging schedule
Who owns the retained earnings of a public firm?
Inland Revenue Board Of Malaysia
Common stockholders
Bondholders
Preferred stockholders
Which of the basic financial statements is best used to answer the questions "What does the company own and how is it financed?"
Balance sheet
Statement of shareholder's equity
Income statement
Cash flow statement
Which of the basic financial statements is best used to answer the questions "Where did the company's money come from and how was it spent over the preceding year?"
Balance sheet
Statement of shareholder's equity
Income statement
Cash flow statement
Which of the basic financial statements is best used to answer questions about changes in owner's equity that are not explained by the income statement?
Balance sheet
Statement of shareholder's equity
Income statement
Cash flow statement
On the income statement, sales revenue, minus cost of goods sold and operating expenses, equals which of the following?
Net profit
Retained earnings
Net income available to preferred shareholders
Earning Before Interest and Tax
Which of the following streams of income is not affected by how a firm is financed (whether with debt or equity)?
Net profit after tax but before dividends
Net working capital
Operating income
Income before tax
Which of the following is not included in computing EBT (earnings before taxes)?
Marketing expenses
Depreciation expense
Cost of goods sold
Dividends
Your firm has the following income statement items:
Sales of RM50,250
Cost of goods sold of RM35,025
Operating expenses of RM10,115
Interest expense of RM750; and
Income tax of RM1,744
What is the amount of the firm's EBIT?
RM15,552
RM58,000
RM5,110
RM4,630
Your firm has the following income statement items:
Sales of RM50,250
Cost of goods sold of RM35,025
Operating expenses of RM8,750
Interest expense of RM750; and
Income tax of RM1,744
What is the amount of the firm's net income?
RM26,616
RM4,731
RM2,616
RM7,775
Which of the following is not a current asset?
Accounts payable
Marketable securities
Accounts receivable
Inventory
Your firm has the following balance sheet statement items:
Total current liabilities of RM805,000;
Total assets of RM2,655,000
Fixed and other assets of RM1,770,000; and
Long-term debt of RM200,000.
What is the amount of the firm's total current assets?
RM885,000
RM1,550,000
RM600,000
RM325,000
Which of the following would NOT be included as a liability in a corporate balance sheet?
Notes payable
Accounts payable
Bonds
Accumulated Depreciation
Which of the following parties would perform an external financial analysis?
A firm's compensation committee
A financial analyst forecasting the next period's borrowing needs
A firm's creditors
A CFO comparing the performance of the firm's various divisions
Which of the following parties would perform an internal financial analysis?
A financial analyst forecasting the next period's borrowing needs
A firm's competitors
A firm's creditors
Analysts for investment companies
If you were given the components of current assets and of current liabilities, what ratio(s) could you compute?
(A) Quick ratio or Acid test ratio
(B) Average collection period
(C) Current ratio
(D) Both A and C
(E) All of the above
The debt ratio is a measure of a firm's ....
leverage.
profitability.
liquidity.
efficiency.
Given an accounts receivable turnover of 8 and annual credit sales of RM362,000, the average collection period (360-day year) is
90 days.
45 days.
5 days.
60 days.
The question "Did the common stockholders receive an adequate return on their investment?" is answered through the use of
liquidity ratios.
profitability ratios.
asset management ratios.
leverage ratios.
ChaCha Corporation has current assets of RM11,400, inventories of RM4,000, and a current ratio of 2.6. What is ChaCha's quick or acid test ratio?
1.69
0.54
0.74
1.35
