Note: The balance sheet and income statement above are from an actual publicly traded company. Use the financial statements provided to answer questions 21-26. 21) Which of the following is FALSE? a) The companys return on equity INCREASED from 2010 to 2011. b) The companys inventory turnover INCREASED from 2010 to 2011. c) The companys accounts receivable turnover DECREASED from 2010 to 2011. d) The companys net profitability DECREASED from 2010 to 2011.

22) Note that the companys total assets grew by roughly 43% over 2011. Understanding that asset growth is achieved mainly through debt and equity issuance and profitable operations, what is the ordering of the sources of this companys asset growth, from GREATEST to LEAST impact? a) 1. Debt Issuance; 2. Equity Issuance; and 3. Profitable Operations b) 1. Debt Issuance; 2. Profitable Operations; and 3. Equity Issuance c) 1. Equity Issuance; 2. Debt Issuance; and 3. Profitable Operations d) 1. Equity Issuance; 2. Profitable Operations; and 3. Debt Issuance e) 1. Profitable Operations; 2. Debt Issuance; and 3. Equity Issuance f) 1. Profitable Operations; 2. Equity Issuance; and 3. Debt Issuance

23) True or False At the end of 2011, the company can still raise capital by issuing common stock without having to change the corporate charter (note: we discussed this concept in Unit 3). a) TRUE b) FALSE

24) True or False The company acquired other corporate entities during 2011 (note: we discussed the balance sheet account that reflects acquisition activity in Unit 2). a) TRUE b) FALSE

25) True or False If cost of sales relate to variable costs and operating expenses mainly consist of fixed costs, then in 2011, the companys variable cost per one unit of sales decreased relative to 2010. a) TRUE b) FALSE

26) Note that the company recognized interest income in both 2010 and 2011. This income most likely relates to: a) Interest paid to bondholders. b) Interest income from prepaid expenses. c) Amortization of intangible assets. d) Interest from notes receivable.

*** COMPREHENSIVE QUESTIONS *** CONSOLIDATED BALANCE SHEET (in millions 66.151 Cash and cash equivalents Accounts receivable, net of allowances Inventories Short-term investments Prepaid expenses Other current assets Total Current Assets Notes receivable Property and equipment, net Deferred taxes Other long-term assets Goodwill.net Intangibles.net Total Assets Dec 31, 2011 Dec 31, 2010 102,830 153,424 70.948 59.644 39557 5,659 13,289 15.289 11.044 9.711 9,078 346.357 210.067 11.491 10.875 31,587 20.791 2.428 7,844 73.261 116,846 75,595 38,613 98.86742662 639,786 447,696 Accounts payable 69,747 37.089 Accrued expenses 34,327 18,425 Other current liabilities 31,014 www.15.917. Total current liabilities 135,088 71,431 Long-term Liabilities 29.040W18.967 Total liabilities 165,028 90,398 Common stock. 50.0001 par, 60,000 shares authorized 51.408 and 50.423 shares issuedt 43.005 and 42,020 shares outstanding at Dec 31, 2011 and 2010, respectively 5 Additional paid-in capital 186 325 165,773 Retained eamings 420.411 323.092 AOCI 678 972 Treasury stock, 8.403 and 8.403 shares at cost at Dec 31, 2011 and 2010, respectively (132.543) (132.543) Noncontrolling equity interests (118) Total stockholders' equity 47453 3729822 Total liabilities and stockholders' equity 639,786 447,696 CONSOLDATED STATEMENTS OF INCOME (in millions) Dec 31, 2011 Dec 31, 2010 Sales revenue, net 968,549635,418 Cost of sales (606,601) (359,564) Gross profit 361,948275,854 Operating expenses (208.178) (154 230) Earnings before interest and tax 153.770 121,624 Interest income (expense) 5,022 4,233 Earnings before tax 158,792 125,857 Provision for income taxes (61,473) (50,132) Net income 97.31975.725 Footnotes: Accounts receivable are stated in relation to sales, less allowance for doubtfill accounts. Inventories consist of finished goods on hand and in transit. Property and equpucent are stated at cost less accumulated depreciation. Depreciation is computed utilizing the straigint-line method based on estimated useful lives ranging from three to ten years. The Company's goodwill is not amortized rather it is tested for impairment on an annual basis or more often if events or circumstances change that could cause goodwill to become impaired. o o o