Which of the following best describes the potential impact of business risk on Earnings Quality? Select one: a. Higher earnings quality is linked with companies more insulated from business risk. While business risk is not primarily a result of management's discretionary actions, this risk can be lowered by skillful management strategies. O b. For managing business risk, the managers almost have no discretion, therefore business risk is not directly or indirectly related to earnings quality. c. A higher level of earnings quality can be observed in the industries with high business risk, because higher risk means higher returns d. Business risk is mostly composed of financial risk factors and it has minimal effect on earnings quality. Balance sheet extracts as at 31/12/2018 & 31/12/2019 2018(RO) 2019(RO) Non-current 21000 20000 assets Current assets Inventories 4000 5000 Account 2500 2000 receivables Prepaid 300 500 Expenses Current liabilities Trade payables 5000 4000 Accruals 1200 700 The operating profit for 2019 was RO 17,000 and the depreciation for the year was RO 8,000. There has been loss on sale of fixed asset RO 3500.What was the net cash generated from operations for 2019? Select one: O a. Inflow RO 26300 O b. Inflow RO 27800 III Question 3 Not yet answered Marked out of 2 P Flag question Net Profit during the year 1,00,000 Receivables in the beginning the year of 30,000 Receivables at the end of the year 36,000 What is the amount of cash from operating activities? Select one: O a. 1,66,000 O b. 30,000 O c. 1,06,000 O d. 394,000 Which one of the following is correct (i) A ratio is an arithmetical relationship of one number to another number (ii) Liquid ratio is also known as acid test ratio. (iii) Role of thumb for current ratio is 2:1 (iv) Debt equity ratio is the relationship between outsiders fund and shareholders fund Select one: a. Only (ii) and (iii) are correct. O b. Only (i), (ii) and (iii) are correct. O c. all of the above O d. Only (ii), (iii) and (iv) are correct. Question 5 Not yet answered Marked out of 1 Flag question The statement of cash flow clarifies cash flows according to Select one: a. Operating and Non-operating Flows b. Inflow and Outflow c. Operating, Investing, and Financing Activities d. Investing and Non-operating Flows : Question 6 Not yet answered Marked out of 2 P Flag question Which of the following properly lists balance sheet items in order of liquidity, from most liquid to least liquid? Select one: a. Cash, marketable securities, accounts receivable, inventory. O b. Accounts receivable, inventory, marketable securities, cash. O c. Cash, inventory, accounts receivable, marketable securities. O d. Inventory, marketable securities, cash, accounts receivable. 1. : III | Assets 2019 2018 2017 2016 Cash 10,000 15,000 12,000 8,000 Other 18,000 15,000 13,000 10,000 current assets Plant and 20,00023,000 24,000 15,000 equipment Total 48,00053,00049,00033,000 assets Which of the following statements is true? Select one: O a. Cash had the greatest percentage decrease between 2018 and 2019 O. Cash was always the same percentage of total assets c. Plant and equipment had the largest percentage gain from 2016 to 2017 O d. Cash increased at a faster rate than total assets from 2016 to 2019 Question 8 Not yet answered Marked out of 2 P Flag question A horizontal analysis of balance sheet data involves a comparison of a balance sheet amount on a given date with the Select one: O a. Net sales from the income statement for the period ending on that date. O b. Total stockholders' equity on the balance sheet for that date. c. Amount for the same balance sheet item on a previous date. O d. Total of the assets on the balance sheet for that date. Question 9 Not yet answered Marked out of 1 Flag question 1. = Question 9 Not yet answered Marked out of 1 P Flag question Financial forecasting process starts with the preparation of balance sheet and then followed by the preparation of income statement. The most important step and it drives all other items of financial statement forecasts is: Select one: O a. The estimation of total assets O b. The estimation of total sales O c. The estimation of net income d. The estimation of total equity Question 10 Not yet answered Marked out of 1 Flag question Question 10 Not yet answered Marked out of 1 P Flag question Which calculating cash flow from operating activities which is added net profit ? Select one: O a. Decrease in Creditors O b. Increase in Debtors c. Decrease in Stock d. Increase in Stock 1. : Question 12 Not yet answered Marked out of 2 P Flag question | Salalah company is in the process of financial forecasting for the next year. The company's balance sheet shows a retained earnings of 700 in the last year and forecasted income statement showed a net profit of 400. The management had decided to distribute 30% of the profit as dividend. According to the information above, which of the following would be the retained earnings in the forecasted balance sheet? Select one: O a. 980 O b. 1100 O c. 700 O d. 1120 1. : III 2001 2000 1999 1998 Sales 160,000130,000100,00080,000 Cost of 96,000 71,500 53,000 41,600 goods sold Net 28,000 26,000 25,000 24,000 Income Which of the following statements is NOT true? Select one: O a. Gross profit on sales has increased 66.67% since 1998 O b. Sales have increased 200% since 1998 c. Net income has increased 16.67%since 1998 O d. Net income as a percentage of sales has decreased Question 14 Not yet answered Marked out of 1 P Flag question The construction of the pro forma income statement is based on: Select one: a. Sales projections and the production plan O b. The prior year's income statement O c. The cash budget Od. The cash budget and prior year's income statement Question 15 Not yet answered Marked out of 1 P Flag question Interpretation of accounts is Select one: O a. All of the above b. To know financial strengths and weaknesses of the business environment c. To know the causes for the prevailing performance of business d. The art and science of translating the Management views : Which of the following statements about the analysis of earnings quality in income statement or balance sheet is NOT correct? Select one: O a. Discretionary expenditures are outlays that management can vary across periods to conserve resources and/or influence reported earnings. Therefore, they deserve special attention in the analysis. O b. The analysis of advertising expense in the income statement must look at year-to-year variations in to assess their impact on future sales and earnings quality. O c. Earnings are relieved of charges necessary to bring some assets down to realizable values. Examples include the delay in recognizing impaired assets, and the understatement of allowance for uncollectible accounts receivable O d. A careful analysis of non- discretionary expenses and the assets which requires no judgement is also very important : Not yet answered Marked out of 2 Flag question At December 31 a company's records show the following information: Cash Accounts Receivable Inventory Prepaid Insurance Long-term Assets Accounts Payable Notes Payable due in 10 months Wages Payable Long-term Liabilities Stockholders' (Owner's) Equity $ 10,000 30,000 80,000 6.000 200,000 30,000 25,000 5,000 70,000 196,000 The company's quick ratio is Select one: a. 1.0:1 O b. None of the above O c.0.7:1 O d. 2.0:1 Question 18 Not yet answered Marked out of 2 Flag question ABC Ltd had investment of OMR 68,000 as on 31.12.2020 and investment of OMR 56,000 as on 31.12.2021. During the year ABC Ltd sold 40% of its investments being held in the beginning of period at a profit of OMR 16,800. Determine cash flow from investing activities. Select one: O a. OMR 59,200 O b. OMR 28,800 O c. OMR 72,800 O d. None of the above : Flag question Dan Woods, a finance officer at Middlebrook Corp., is attempting to forecast next year's income statement and balance sheet. Current sales are OMR 565,000 and are expected to increase 15% next year. The majority of the firm's operating expenses are expected to increase, including the amortization expense which will increase to OMR 135,400. The increase is due to the planned purchase of new equipment costing OMR 287,000. Currently the firm has total net fixed assets of OMR 847,000. What will be the value of net fixed assets in the forecasted year? Select one: O a OMR 998,600 O b. OMR 287,000 c. OMR 847,000 d. OMR 1,134,000 Question 20 Not yet answered Mind out of 1 : Marked out of 2 P Flag question A company's net income after tax was OMR 400,000 for its most recent year. The company's income statement included Income Tax Expense of OMR 140,000 and Interest Expense of OMR 60,000. At the beginning of the year the company's stockholders' equity was OMR 1,900,000 and at the end of the year it was OMR 2,100,000 What is the times interest earned for the company? Select one: O a. 10.0 O b. None of the above O c. 6.7 O d. 9.0 Question 25 Not yet answered : Marked out of 2 P Flag question Dan Woods, a finance officer at Middlebrook Corp., is attempting to forecast next year's income statement and balance sheet. Current sales are OMR 565,000 and are expected to increase 15% next year. The majority of the firm's operating expenses are expected to increase, including the amortization expense which will increase to OMR 135,400. The increase is due to the planned purchase of new equipment costing OMR 287,000. Currently the firm has total net fixed assets of OMR 847,000. What will be the value of net fixed assets in the forecasted year? | Select one: O a OMR 998,600 O b. OMR 287,000 O C. OMR 847,000 O d. OMR 1,134,000 Question 20