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Exam 15: Financial Statement Analysis

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Question 1

True/False

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Reporting unusual items separately on the income statement allows investors to isolate the effects of these items on income and cash flows.

A) True
B) False

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Question 2

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Short-term creditors are typically most interested in assessing

A) marketability.
B) profitability.
C) operating results.
D) solvency.

E) B) and C)
F) All of the above

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Question 3

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When a company changes from one acceptable accounting method to another,the change is reported

Using measures to assess a business's ability to pay its current liabilities is called current position analysis.

The dividend yield rate is equal to the dividends per share divided by the par value per share of common stock.

The numerator of the rate earned on common stockholders' equity ratio is equal to

Assume the following sales data for a company: What is the percentage increase in sales from 2014 to 2015?

A financial statement showing each item on the statement as a percentage of one key item on the statement is called common-sized financial statements.

If a firm has a current ratio of 2,the subsequent receipt of a 60-day note receivable on account will cause the ratio to decrease.

In a common size income statement,the 100% figure is:

Comparative information taken from the Koda Company financial statements is shown below: Instructions Using horizontal analysis,show the percentage change from 2011 to 2012 with 2011 as the base year.

The percentage analysis of increases and decreases in corresponding items in comparative financial statements is referred to as horizontal analysis.

The following items are reported on a company's balance sheet: Determine the (a)current ratio,and (b)quick ratio.Round your answer to one decimal place.

The Cash and Accounts Receivable for a company are provided below: Based on this information,what is the amount and percentage of increase or decrease that would be shown in a balance sheet with horizontal analysis?

A company reports the following: Determine the ratio of net sales to total assets.Round your answer to one decimal place.

Which one of the following is not a characteristic generally evaluated in ratio analysis?

When the rate of return on total assets ratio is greater than the rate of return on common stockholders' equity ratio,the management of the company has effectively used leverage.

A company reports the following: Determine the (a)rate earned on stockholders' equity,and (b)rate earned on common stockholders' equity.Round your answer to one decimal place.

Income statement information for Sharif Corporation is provided below: Required: Prepare a vertical analysis of the given income statement information for Sharif Corporation.

The numerator of the rate earned on total assets ratio is equal to