1. Which analysis tool determines the percentage of increase or decrease over time? (Points : 4)

Vertical analysis Change analysis Horizontal analysis Ratio analysis

Question 2.2. The company president wants to determine how his company compares to his main competitor. Which analysis tool will his accountant use? (Points : 4)

Intracompany comparison Intercompany comparison Ratio comparison Industry comparison

Question 3.3. An accountant wants to determine how net income compared to sales last month. Which analysis tool would the accountant use? (Points : 4)

Vertical analysis Horizontal analysis Change analysis Linear analysis

Question 4.4. Is there any effect on the percentage of net income to sales if the cost of goods sold increased as a percentage of sales, and operating expenses increased as a percentage of net income? (Points : 4)

Yes, it increases Yes, it decreases No, there is no effect There is insufficient data.

Question 5.5. What is an advantage of vertical analysis? (Points : 4)

Allows for the comparison of prior years financial data Allows for the analysis of changes in percentages of specific financial statement items Allows for the comparison of large and small companies Allows for the analysis of yearly changes in specific financial statement items

Question 6.6. What is another name for common-size analysis? (Points : 4)

Ratio analysis Vertical analysis Change analysis Horizontal analysis

Question 7.7. What does vertical analysis evaluate? (Points : 4)

Increases or decreases in financial statement items Comparison with prior year financial data A financial statement item as a percentage of a base amount A financial statement item compared with prior month amount

Question 8.8. When performing vertical analysis on an income statement, what is the base item? (Points : 4)

Net income Net sales Gross profit Gross sales

Question 9.9. What is the formula for horizontal analysis of changes since the base year? (Points : 4)

Current year plus base year amount divided by base year amount Base year amount divided by current year amount plus base year amount Base year divided by current year amount minus base year amount Current year minus base year amount divided by base year amount

Question 10.10. In vertical analysis on a balance sheet, what is the base for accounts payable? (Points : 4)

Total liabilities divided by current assets Total assets Current assets Total liabilities and stockholders equity

Question 11.11. Which analysis tool would be used to determine days sales in receivables? (Points : 4)

Horizontal analysis Vertical analysis Change analysis Ratio analysis

Question 12.12. How does vertical analysis present each financial statement item? (Points : 4)

As a percentage of a base amount As an increase or decrease in dollar amount As a percentage of a prior year amount As a ranking from lowest to highest

Question 13.13. Which statement describes the current ratio? (Points : 4)

Current assets minus current liabilities Current liabilities divided by current assets Current liabilities plus current assets Current assets divided by current liabilities

Question 14.14. Review the information below, and then answer the question that follows. Sales - $3,000,000 Cost of goods sold - $2,500,000 Beginning inventory - $120,000 Ending inventory - $80,000 What is the inventory turnover? (Points : 4)

2.5 times 3 times 25 times 30 times

Question 15.15. A company had $565,000 of net income; $43,000 of income taxes; and $63,000 of interest expense. What is the times interest earned ratio? (Points : 4)

7.28 times 8.29 times 8.97 times 13.1 times