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These are all TRUE/FALSE questions A trend percentage is calculated as the current year divided by the base year. Most public companies present trend information

These are all TRUE/FALSE questions

  1. A trend percentage is calculated as the current year divided by the base year.
  2. Most public companies present trend information in their annual reports.
  3. The total assets dollar amount is typically used as the base for a common-size balance sheet analysis.
  4. Most accounting computer programs, such as QuickBooks, provide common-size analysis reports.
  5. The current ratio is the same as the quick ratio.
  6. If Company A had earnings per share of $4 and Company B had earnings per share of $3, then it is accurate to conclude that Company A was more profitable.
  7. If a company's return on assets is higher than its return on shareholders' equity, then it has positive financial leverage.
  8. Companies with higher inventory turnover ratios tend to have lower inventory costs, including lower inventory storage and insurance costs, than companies with lower inventory turnover ratios.
  9. In general, managers prefer expenses as a percent of net sales to increase over time.
  10. In general, managers prefer the profit margin ratio to decrease over time.
  11. The quick ratio is a short-term liquidity ratio.
  12. Times interest earned indicates the company's ability to cover its interest expense related to long-term debt with current period earnings..
  13. A current ratio of greater than 1.0 would indicate that current assets exceed current liabilities.
  14. Return on assets is calculated as average total assets divided by net income.
  15. The debt to assets ratio is calculated as total assets divided by total liabilities.
  16. A relatively high price-earnings ratio indicates investors expect favorable future earnings.
  17. Return on assets is a market valuation measure.

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