3) Cash flow from financing activities has been fairly steady, and slightly negative, throughout this period. Which of the following transactions can cause financing cash flow to be negative?

a)	increased depreciation expense

b)	disposal of long-lived assets

c)	a higher income tax rate

d)	paying down a bank loan

e)	purchase of long-lived assets

4) Which type of financial ratio can be calculated from both income statement and balance sheet figures?

a)	profitability and efficiency

b)	efficiency

c)

liquidity

d)	profitability

e)

solvency

5). Which type of financial ratio tells you how well a company can cover its long-term liabilities?

a)	efficiency

b)	profitability

c)

solvency

d)	profitability and efficiency

e)

liquidity

6) Which type of financial ratio tells you how well a company can cover its current liabilities?

a)	efficiency

b)

liquidity

c)	profitability

d)

solvency

e)	profitability and efficiency

7) Which of the following is a liquidity ratio?

a)	current ratio

b)	debt-to-total-assets ratio

c)	gross profit ratio

d)	days' sales in accounts receivable

e)	debt-to-equity ratio

8) In a horizontal analysis of an income statement, what is the correct formula to calculate the percentages?

a)	divide the change by net sales

b)	divide the change by last year's amount

c)	divide each item's amount by last yeat's amount

d)	divide each item's amount by profit

e)	divide each item's amount by net sales

9) In a vertical analysis of a balance sheet, what is the correct formula to calculate the percentages?

a)	divide each item by total current assets

b)	divide each item by total equity

c)	divide the change by last year's amount

d)	divide each item by total assets

e)	divide each asset item by total assets and divide each liabiity item by total liabilities

10). A vertical analysis of an income statement tells you

a)	whether or not a company is more profitable than its competitors.

b)	how a specific item has changed from year to year.

c)	how much cash the company has and whether or not it can pay its debts.

d)	whether or not a company is a going concern.

e)	the portion of net sales represented by each line on the statement.

11). A horizontal analysis of a balance sheet tells you

a)	how much cash the company has and whether or not it can pay its debts.

b)	how a particular item has changed from year to year

c)	the portion of total assets that a particular asset comprises

d)	whether or not a company is a going concern.

e)	whether or not a company is more profitable than its competitors.

ThisIsMyCo Inc. has been your business for the past several years. You have put together your cash flow statements for the past 3 years to get a better idea of how 3 your business is managing cash flow. Year ending December 31 Cash flow from operations Cash flow from investing Cash flow from financing Net change in cash Cash, beginning of year Cash, end of year Profit for the year 2021 2020 2019 31,000 32,000 30,000 -4,000 -3,000 -5,000 -20,000 -18,000 -15,000 7,000 11,000 10,000 66,000 55,000 45,000 73,000 66,000 55,000 35,000 34,000 32,000 The next five questions relate to the cash flow statements below. The rest of the questions in this section of the exam are independent