14) When performing vertical analysis of an income statement, the base amount is_ A) total expenses B) net sales C) sales revenue D) gross profit 15) In preparing a statement of cash flows using the indirect method, the Depreciation Expense A) is added back as an adjustment to Net Income in the operating activities section B) is shown as a negative cash flow in the investing activities section C) is added back to Purchases of Plant Assets under investing activities D) is shown as a negative cash flow under operating activities . PART 1: MULTIPLE CHOICE: 20 POINTS 1) Free cash flow is equal to the cash flow from operating activities less cash payments: A) to retire bonds. B) for inventory purchases. C) for planned investments and cash dividends. D) for planned salary raises. 2) A company purchases land usin prepares the statement of cash flows? A) The purchase of land would be presented in the financing activities section as a cash payment. B) The purchase of land would be presented in the investing activities section as a cash payment under both methods. C) T g its common stock. Where would this transaction appear when the company he purchase of land would be presented in the non-cash investing and financing activities section. D) The purchase of land would be presented in the operating activities section as a reduction in net income. 3) A payment of interest on a loan would be considered a: A cash outflow from operating activities cash outflow from investing activities. C) cash outflow from financing activities. D) noncash activity. 4) Which of the following is the CORRECT order of the sections on a statement of cash flows? A) Operating, financing, investing B) Financing, investing, operating C) Investing, operating, financing Operating, investing, financing 5) Olivera Company provides the following data for the year 2017: Net sales revenue Cost of goods sold Operating expenses Income tax expense S398,000 $255,000 $95,000 $9,000 On a yertical analysis, what percentage would be shown for operating income? A) 12.9% B) 33.6% C) 12.1% D)31.4% 6) Which of the following ratios is used to determine how quickly and easily a company is able to sell its inventory? A) Current ratio B) Inventory turnover C) Price/earnings ratio D) Return on net sales