The primary purpose of the statement of cash flows is to report all major cash receipts (inflows) and cash payments (outflows) during a period.

Group of answer choices

True

False

Flag this Question

Question 23 pts

Financial statement analysis uses analytical tools (ratios) to review financial statements in order to make better business decisions.

Group of answer choices

True

False

Flag this Question

Question 33 pts

Liquidity and efficiency ratios are the ability to meet long-term obligations and to efficiently generate revenue.

Group of answer choices

True

False

Flag this Question

Question 43 pts

Profitability ratios show the ability to generate positive market expectations.

Group of answer choices

True

False

Flag this Question

Question 53 pts

A non-cash investing transaction is required by full-disclosure principle, to be listed below the statement of cash flow or in notes to financial statements.

Group of answer choices

True

False

Flag this Question

Question 63 pts

The four basic financial statements are the Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash Flows.

Group of answer choices

True

False

Flag this Question

Question 73 pts

A company with a current ratio of 1 or lower is considered a good credit risk.

Group of answer choices

True

False

Flag this Question

Question 83 pts

Accounts receivable turnover is how frequently a company converts its receivables into cash, so a higher ratio is better.

Group of answer choices

True

False

Flag this Question

Question 93 pts

The guideline for Days' Sales Uncollected is 1 and 1/3 times the days in its credit period.

Group of answer choices

True

False

Flag this Question

Question 103 pts

If you add the Debt Ratio + Equity Ratio, these should equal 100%.

Group of answer choices

True

False

Flag this Question

Question 113 pts

The direct method for the preparation of the operating activities section of the statement of cash flows:

Group of answer choices

Separately lists each major item of operating cash receipts and cash payments

Reports adjustments to reconcile net income to net cash provided or used by operating activities in the statement

Is required if the company is a merchandiser

Reports a different amount of cash flows from operations than if the indirect method is used

Flag this Question

Question 123 pts

The first line item in the operating activities section of a spreadsheet for a statement of cash flows prepared using the indirect method is:

Group of answer choices

Cash

Net Income

Cash received from customers

Increase (decrease) in accounts receivable

Flag this Question

Question 133 pts

The building blocks of financial statement analysis do not include:

Group of answer choices

Liquidity and Efficiency

Solvency

Profitability

External analyst services

Flag this Question

Question 143 pts

The ability to generate future revenues and meet long-term obligations is referred to as:

Group of answer choices

Liquidity and Efficiency

Profitability

Solvency

Market prospects

Flag this Question

Question 153 pts

The ability to provide financial rewards sufficient to attract and retain financing is called:

Group of answer choices

Profitability

Solvency

Liquidity and Efficiency

Market prospects

Flag this Question

Question 163 pts

A dividend yield of little or no dividend means this stock is what type of stock?

Group of answer choices

Growth Stock

Income Stock

Treasury Stock

Preferred Stock

Flag this Question

Question 173 pts

A company's stock is considered over-priced if the Price-Earnings ratio comes out to:

Group of answer choices

zero

less than 5

higher than 20-25

lower than 5-8

Flag this Question

Question 183 pts

A comparison of a company's financial condition and performance across time (left to right comparison) is what type of analysis?

Group of answer choices

Horizontal analysis

Vertical analysis

Equity analysis

Income analysis

Flag this Question

Question 193 pts

Standards for comparison when analyzing financial ratios are all of the following except:

Group of answer choices

Intracompany

Flip-a-coin

Competitor

Industry

Flag this Question

Question 203 pts

Which ratio is a Liquidity and Efficiency calculation?

Group of answer choices

Debt ratio

Profit margin ratio

Price-Earnings ratio

Total asset turnover

Flag this Question

Question 2170 pts

Use the following financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2018 using the indirect method.

Monterey Company Balance Sheets At December 31
	2018	2017
Assets:
Cash	$85,600	$65,200
Accounts receivable, net	72,850	56,750
Merchandise inventory	157,750	144,850
Prepaid expenses	6,080	12,680
Equipment	280,600	245,600
Accumulated depreciation-Equipment	(80,600)	(97,600)
Total assets	$522,280	$427,480
Liabilities:
Accounts payable	$52,850	$45,450
Income taxes payable	15,240	12,240
Notes payable (long term)	59,200	79,200
Total liabilities	$127,290	$136,890
Equity:
Common stock	200,000	150,000
Paid-in capital in excess of par	53,000	40,000
Retained earnings	141,990	100,590
Total equity	$394,990	$290,590
Total liabilities and equity	$522,280	$427,480

Monterey Company Income Statement For Year Ended December 31, 2018
Sales		$488,000
Cost of goods sold	$212,540
Depreciation expense	43,000
Other operating expenses	106,260
Interest expense	6,400	(368,200)
Other gains (losses):
Gain on sale of equipment		4,700
Income before taxes		124,500
Income taxes expense		41,100
Net income		$83,400

Additional Information a. Cash dividends declared and paid were $62,000. b. New equipment is purchased for $120,000 cash. c. Received $29,700 cash for the sale of equipment.

d. Issued new shares of stock receiving $63,000 cash.

HTML EditorKeyboard Shortcuts

12pt

Paragraph

0 words

Flag this Question

Question 2220 pts

Use the balance sheets of Glover shown below to calculate the following ratios for 2019 (round to 2 decimal places): (a) Current ratio.

(b) Acid-test ratio.

(c) Debt ratio.

(d) Equity ratio.

Glover Company Balance Sheets December 31, 2019 and 2018
	2019	2018
Assets:
Cash	$43,000	$22,000
Accounts receivable	38,000	42,000
Merchandise inventory	61,000	52,000
Prepaid insurance	6,000	9,000
Long-term investments	49,000	20,000
Plant assets (net)	218,000	218,000
Total assets	$415,000	$363,000
Liabilities and Equity:
Current liabilities	$62,000	$75,000
Long-term liabilities	45,000	36,000
Common stock	150,000	150,000
Retained earnings	158,000	102,000
Total liabilities and equity	$415,000	$363,000