17. All of the following are true of a financial statement analysis report, except: a Accounting standards determine which ratios are relevant and useful for the analysis b. The executive summary provides a brief analysis of results C. The analysis overview includes background on the company, its industry, and the economy d. Evidential matter includes ratios, trends, comparisons and all analytical measures e Background on the company, its industry, and the economy is part of the analysis Overview 18. The statement of cash flows helps analysts evaluate all but which of the following? a. Ability of the company to generate profit b. Source of cash used for plant expansion c. Differences between net income and net operating cash flow d. Source of cash used to finance investing activities e. Source of cash used for debt repayments 19. Common uses of the statement of cash flows include all but which of the following? a. Management prediction of future cash flows for decision making b. Investor assessment of cash flows before buying and selling stock c. Creditor evaluation of a company's ability to generate cash to cover debt d. Government assessment of whether the company paid the correct amount of taxes e. Management determination of the specific sources and uses of cash 20. All of the following are examples of noncash financing and investing except a. Retirement of debt by issuing equity stock b. Purchase of equipment by issuing a note payable c. Purchase of inventory using cash d. Purchase of a building by issuing equity stock e. Conversion of preferred stock to common stock TRUE/FALSE (2 points each Mark your answers on the Scantron Sheet: A if the statement is True, and B if the statement is False. 21. Financial statement analysis applies analytical tools to financial statements and related data for making business decisions. 22. The evaluation of company performance and financial condition focuses solely on past performance. 23. Profitability is the ability to provide financial rewards sufficient to attract and retain financing 24. One of the similarities of bond and equity financing is that both dividends and equity distribution payments are tax deductible. 25. Term bonds mature on one specified date, whereas serial bonds mature at more than one date. 26. A bond's par value is not necessarily the same as its market value. Page 4 of 6