Indicate whether the following statements are TRUE (T) or FALSE (F).

1. Statement of cash flows is not useful in assessing the risk of a company.
2. Accrual accounting is more subjective than cash basis accounting.
3. Companies with intangible assets are generally harder to value than companies with tangible assets.
4. GAAP requires that the method used to account for inventory valuation should be consistent with the physical flow of goods.
5. LIFO inventory values are generally more meaningful than FIFO inventory values for computing current ratios (current assets over current liability).
6. Notes to financial statements can provide significant additional information beyond that contained in the financial statements.
7. Debt agreement may contain restrictions preventing the borrower from making unlimited additional borrowings.
8. It is possible for a borrower to relax debt restrictions by changing accounting methods it uses for financial reporting.
9. Depreciation method used by a firm for preparing financial statements has to be the same as the depreciation method that the firms uses for preparing its tax returns (to compute the tax obligation to the government).
10. Higher profit margin ratio suggests less sales discount and better cost control.
11. Higher asset turnover ratio suggest less efficient utilization of assets.
12. Higher times interest earned ratio suggest better long term solvency.
13. Increasing the debt to equity ratio is always beneficial for the company.