I would like if you can check my practice homework and let me know if my answer are correct or not? Thanks

Oscar

1). Which one of the following is the financial statement that shows a financial snapshot, taken at a point in time, of all the assets the company owns and all the claims against those assets? Select one: a. income statement b. creditor's statement c. balance sheet d. cash flow statement e. sources and uses statement 2). Which one of the following is the financial statement that summarizes a firm's revenue and expenses over a period of time? Select one: a. income statement b. balance sheet c. cash flow statement d. sources and uses statement e. market value statement 3). Which one of the following is the financial statement that summarizes changes in the company's cash balance over a period of time? Select one: a. income statement b. balance sheet c. cash flow statement d. shareholders' equity statement e. market value statement 4). Which one of the following is a source of cash? Select one: a. increase in accounts receivable b. decrease in notes payable c. decrease in common stock d. increase in inventory e. increase in accounts payable 5). Which one of the following is a use of cash? Select one: a. increase in notes payable b. increase in inventory c. increase in long-term debt d. decrease in accounts receivable e. increase in common stock 6). Which of the following statements concerning the cash flow production cycle is true? Select one: a. The profits reported in a given time period equal the cash flows generated. b. A company's operations and finances are independent of each other. c. Financial statements have nothing to do with reality. d. The movement of cash to inventory, to accounts receivable, and back to cash is known as the firm's working capital cycle. e. A profitable company will always have sufficient cash to meet its obligations. 7). Which of the following statements concerning a firm's cash flows and profits is false? Select one: a. Managers must be at least as concerned with cash flows as with profits. b. A company that sells merchandise at a profit will generate cash soon enough to replenish cash flows required for continued production. c. The cash flows generated in a given time period can differ from the profits reported. d. Profits are no assurance that cash flow will be sufficient to maintain solvency. e. Due to required cash investments in current assets, fast-growing and profitable companies can literally "grow broke". 8). Which one of the following is a source of cash? Select one: a. decrease in accounts receivable b. decrease in common stock c. decrease in long-term debt d. decrease in accounts payable e. increase in inventory 9). Noncash items refer to: Select one: a. sales which are made on a credit basis. b. inventory items purchased using credit. c. intangible assets such as patents. d. expenses, like depreciation, which do not directly affect cash flows. e. administrative expenses. 10). Which of the following tends to cause differences between market values and book values? I. Accounting often creates a dichotomy between realized and unrealized income. II. Accountants allocate goodwill when a firm is acquired for more than book value. III. Many accounting values are transactions-based and hence backward-looking. IV. The use of fair-value accounting. V. Accountants refuse to assign a cost to equity capital. Select one: a. I and II only b. I and III only c. II and IV only d. I, III, and IV only e. I, III, and V only f. I, III, IV, and V only 11). The most popular yardstick of financial performance among investors and senior managers is the: Select one: a. profit margin. b. return on equity. c. return on assets. d. times burden covered ratio. e. earnings yield. f. None of the above. 12). Which of these ratios, or levers of performance, are the determinants of ROE? I. profit margin II. financial leverage III. times interest earned IV. asset turnover Select one: a. I and IV only b. II and IV only c. I, II, and IV only d. I, II, and III only e. I, III, and IV only f. I, II, III, and IV 13). Ratios that measure how efficiently a firm manages its assets and operations to generate net income are referred to as _____ ratios. Select one: a. asset turnover and control b. financial leverage c. coverage d. profitability e. None of the above. 14). Which of the following ratios are measures of a firm's liquidity? I. fixed asset turnover ratio II. current ratio III. debt-equity ratio IV. acid test Select one: a. I and III only b. II and IV only c. III and IV only d. I, II, and III only e. I, III, and IV only 15). Assume you are a banker who has loaned money to a firm, but that firm is now facing increased competition and reduced cash flows. Which one of the following ratios would you most closely monitor to evaluate the firm's ability to repay its loan? Select one: a. current ratio b. debt-to-equity ratio c. times interest earned ratio d. times burden covered ratio e. None of the above. 16). Which one of the following statements is correct? Select one: a. If the debt-to-assets ratio is greater than 0.50, then the debt-to-equity ratio must be less than 1.0. b. Long-term creditors would prefer the times interest earned ratio be 1.4 rather than 1.5. c. The assets-to-equity ratio can be computed as 1 plus the debt-to-equity ratio. d. To realize the best risk and reward profile, financial leverage should be maximized. e. None of the above is correct. 17). On a common-size balance sheet, all accounts are expressed as a percentage of: Select one: a. sales for the period. b. the base year sales. c. total equity for the base year. d. total assets for the current year. e. total assets for the base year. 18). (Use Financial Date at the Top) Link Inc.'s current ratio at the end of 2012 is: Select one: a. 10.21 b. 2.31 c. 2.76 d. 10.30 e. None of the above. 19). (Use Financial Date at the Top) Which of the following statements best describes how Link Inc.'s short-term liquidity changed from 2011 to 2012? Select one: a. Link's short-run liquidity has improved modestly. b. Link's short-run liquidity has deteriorated very little, but from a low initial base. c. Link's short-run liquidity has improved considerably, but from a low initial base. d. Link's short-run liquidity has deteriorated considerably, but from a high initial base. e. None of the above. 20). (Use Financial Date at the Top) Link Inc.'s gross margin for 2012 is: Select one: a. -94% b. 13% c. 26% d. 31% e. None of the above. 1). Which one of the following is the financial statement that shows a financial snapshot, taken at a point in time, of all the assets the company owns and all the claims against those assets? Select one: a. income statement b. creditor's statement c. balance sheet d. cash flow statement e. sources and uses statement Yes! When you hear assets, immediately think of the balance sheet. Claims against assets is another way of saying \"Liabilities\". 2). Which one of the following is the financial statement that summarizes a firm's revenue and expenses over a period of time? Select one: a. income statement b. balance sheet c. cash flow statement d. sources and uses statement e. market value statement Revenue - expenses is the net income equation, so the answer is correct! 3). Which one of the following is the financial statement that summarizes changes in the company's cash balance over a period of time? Select one: a. income statement b. balance sheet c. cash flow statement d. shareholders' equity statement e. market value statement Cash flows statement shows changes in the CASH balance in different types of areas in the company, so this answer is correct. 4). Which one of the following is a source of cash? Select one: a. increase in accounts receivable b. decrease in notes payable c. decrease in common stock d. increase in inventory e. increase in accounts payable This question is asking which situation is an INFLOW of cash, and an increase in accounts payable is considered an inflow because you haven't paid for it yet, but you have an increase in assets that have monetary value. So you have 'extra' cash. 5). Which one of the following is a use of cash? Select one: a. increase in notes payable b. increase in inventory c. increase in long-term debt d. decrease in accounts receivable e. increase in common stock This is asking for which situation is an OUTFLOW of cash, and increasing your inventory is paying for inventory with cash, so this answer is correct. 6). Which of the following statements concerning the cash flow production cycle is true? Select one: a. The profits reported in a given time period equal the cash flows generated. b. A company's operations and finances are independent of each other. c. Financial statements have nothing to do with reality. d. The movement of cash to inventory, to accounts receivable, and back to cash is known as the firm's working capital cycle. e. A profitable company will always have sufficient cash to meet its obligations. This is correct because the change in the amount of money you have (aka your profits) is equal to the sum of the change in cash flows. 7). Which of the following statements concerning a firm's cash flows and profits is false? Select one: a. Managers must be at least as concerned with cash flows as with profits. b. A company that sells merchandise at a profit will generate cash soon enough to replenish cash flows required for continued production. c. The cash flows generated in a given time period can differ from the profits reported. d. Profits are no assurance that cash flow will be sufficient to maintain solvency. e. Due to required cash investments in current assets, fast-growing and profitable companies can literally "grow broke". This answer is correct because the \"profit\" could simply just be a 1% profit margin, which might not be enough for continued production. 8). Which one of the following is a source of cash? Select one: a. decrease in accounts receivable b. decrease in common stock c. decrease in long-term debt d. decrease in accounts payable e. increase in inventory Yes, this is an inflow of cash. 9). Noncash items refer to: Select one: a. sales which are made on a credit basis. b. inventory items purchased using credit. c. intangible assets such as patents. d. expenses, like depreciation, which do not directly affect cash flows. e. administrative expenses. Perfect! Correct. 10). Which of the following tends to cause differences between market values and book values? I. Accounting often creates a dichotomy between realized and unrealized income. II. Accountants allocate goodwill when a firm is acquired for more than book value. III. Many accounting values are transactions-based and hence backward-looking. IV. The use of fair-value accounting. V. Accountants refuse to assign a cost to equity capital. Select one: a. I and II only b. I and III only c. II and IV only d. I, III, and IV only e. I, III, and V only f. I, III, IV, and V only Although your answer is correct, I'm not sure if you've learned this yet, but fair value accounting is used when market value of an asset is hard to determine, so it also creates a difference between book value and \"market value\". So I would choose f, but I think e is also correct if you haven't learned it yet. 11). The most popular yardstick of financial performance among investors and senior managers is the: Select one: a. profit margin. b. return on equity. c. return on assets. d. times burden covered ratio. e. earnings yield. f. None of the above. Yes! Correct. 12). Which of these ratios, or levers of performance, are the determinants of ROE? I. profit margin II. financial leverage III. times interest earned IV. asset turnover Select one: a. I and IV only b. II and IV only c. I, II, and IV only d. I, II, and III only e. I, III, and IV only f. I, II, III, and IV Correct! 13). Ratios that measure how efficiently a firm manages its assets and operations to generate net income are referred to as _____ ratios. Select one: a. asset turnover and control b. financial leverage c. coverage d. profitability e. None of the above. These are profitability ratios; the answer is D. 14). Which of the following ratios are measures of a firm's liquidity? I. fixed asset turnover ratio II. current ratio III. debt-equity ratio IV. acid test Select one: a. I and III only b. II and IV only c. III and IV only d. I, II, and III only e. I, III, and IV only Correct! 15). Assume you are a banker who has loaned money to a firm, but that firm is now facing increased competition and reduced cash flows. Which one of the following ratios would you most closely monitor to evaluate the firm's ability to repay its loan? Select one: a. current ratio b. debt-to-equity ratio c. times interest earned ratio d. times burden covered ratio e. None of the above. The current ratio is current assets over current liabilities, which measures liquidity and shows how easily a company is able to pay back its short-term debt with the amount of money they have now. So I would choose A, but if you've learned it in class this way, I would choose D. They are both correct depending on how you look at the question. 16). Which one of the following statements is correct? Select one: a. If the debt-to-assets ratio is greater than 0.50, then the debt-to-equity ratio must be less than 1.0. b. Long-term creditors would prefer the times interest earned ratio be 1.4 rather than 1.5. c. The assets-to-equity ratio can be computed as 1 plus the debt-to-equity ratio. d. To realize the best risk and reward profile, financial leverage should be maximized. e. None of the above is correct. C is correct. 17). On a common-size balance sheet, all accounts are expressed as a percentage of: Select one: a. sales for the period. b. the base year sales. c. total equity for the base year. d. total assets for the current year. e. total assets for the base year. Correct, assuming the balance sheet is for the end of the year. 18). (Use Financial Date at the Top) Link Inc.'s current ratio at the end of 2012 is: Select one: a. 10.21 b. 2.31 c. 2.76 d. 10.30 e. None of the above. Correct, current liabilities/current assets. 19). (Use Financial Date at the Top) Which of the following statements best describes how Link Inc.'s short-term liquidity changed from 2011 to 2012? Select one: a. Link's short-run liquidity has improved modestly. b. Link's short-run liquidity has deteriorated very little, but from a low initial base. c. Link's short-run liquidity has improved considerably, but from a low initial base. d. Link's short-run liquidity has deteriorated considerably, but from a high initial base. e. None of the above. Correct! 20). (Use Financial Date at the Top) Link Inc.'s gross margin for 2012 is: Select one: a. -94% b. 13% c. 26% d. 31% e. None of the above. Gross margin % = (Sales - Cost of goods sold) / Sales 64,591/274,219 = 23.55%, so the answer is none of the above, correct