Question 1 5 / 5 points
The notes to the financial statements related to pension accounting will reveal:
Question options:
a description of undefined benefit pension plans.
a schedule reconciling the funded status of the plan with amounts reported in the firm's balance sheet.
the service cost associated with the firm's defined contribution plan.
the interest cost associated with the firm's defined contribution plan.
Question 2 5 / 5 points
What is important to understand about the label "pro forma"?
Question options:
Pro forma refers to GAAP-based financial statements.
Pro forma requires firms to present two distinct net profit amounts in their Form 10-Ks.
Pro forma relates to the amount of debt in a firm's capital structure.
Pro forma earnings or financial statements are sometimes based on a firm's own definition which is not technically a correct definition.
Question 3 5 / 5 points
The __________ shows the relationship between cash dividends and market price.
Question options:
market yield
earnings yield
share yield
dividend yield
Question 4 5 / 5 points
What does a financial leverage index greater than one indicate about a firm?
Question options:
Return on assets exceeds the return on equity.
Return on equity exceeds the return on assets.
The firm is not employing debt successfully.
The firm does not generate enough funds to cover interest payments.
Question 5 5 / 5 points
Use the following selected financial information for Wilcox Corporation to answer the question below.
Wilcox's total asset turnover ratio is:
Question options:
3.98.
4.22.
5.91.
3.34.
Question 6 5 / 5 points
All of the following items should be assessed when considering the quality of the sales number, EXCEPT which one?
Question options:
Gross vs. net basis
Vendor financing
Gains from sale of assets
Real vs. nominal growth
Question 7 5 / 5 points
__________ financial statements are projections of financial statements based on a set of assumptions regarding future revenues, expenses, level of investments in assets, financing methods and costs, and working capital management.
Question options:
Income
Summary
Pro forma
Balance sheet
Question 8 5 / 5 points
Which of the following items would be considered low quality of financial reporting?
Question options:
Maintaining research and development expenses even if the economy is in a downturn and the net earnings number will be lower as a result
Revealing the poor financial condition of a customer that may file for bankruptcy
Using an accelerated method of depreciation for vehicles
Reducing advertising expenses at a beverage company so that higher earnings are reported
Question 9 5 / 5 points
The __________ cycle or __________ cycle is the normal operating cycle of a firm that consists of buying or manufacturing inventory, selling inventory and paying accounts payable and collecting accounts receivable.
Question options:
cash conversion; net trade
cash conversion; fair market trade
inventory conversion; net trade
inventory conversion; fair market trade
Question 10 5 / 5 points
Which group of people would be the most concerned about the operating areas that have contributed to the success of the firm and which have not?
Question options:
Customers
Management
Auditors
Creditors
Question 11 5 / 5 points
What does a low asset turnover compared to the industry imply?
Question options:
The investment in assets may be too high.
Sales are higher than average.
The investment in assets is too low.
Net income is low relative to the investment in assets.
Question 12 5 / 5 points
The following categories of ratios are used in financial statement analysis:
Liquidity, Operating efficiency (also referred to as Activity), Leverage, Profitability, and Market Measures
Classify the following ratios according to these categories.
Question options:
Times interest earned – market measures; net profit margin - profitability
Times interest earned – market measures; net profit margin – operating efficiency
Times interest earned - leverage; net profit margin - profitability
Times interest earned - leverage; net profit margin – operating efficiency
Question 13 5 / 5 points
Use the following selected financial information for Wilcox Corporation to answer the question below.
Wilcox's effective tax rate is:
Question options:
24.67%.
27.36%.
35.00%.
35.56%.
Question 14 5 / 5 points
Use the following selected financial information for Wilcox Corporation to answer the question below.
Wilcox's average collection period is:
Question options:
5 days.
9 days.
13 days.
15 days.
Question 15 5 / 5 points
Assessing the allowance for doubtful accounts should include all of the following EXCEPT:
Question options:
checking to see if the growth rates of sales, accounts receivable and the allowance for doubtful accounts have moved the exact same percentage and the exact same direction.
calculating growth rates for sales.
reading the notes and the management discussion and analysis.
calculate accounts receivable and the allowance for doubtful accounts.
Question 16 5 / 5 points
Use the following selected financial information for Wilcox Corporation to answer the question below.
Wilcox's cash flow adequacy ratio is:
Question options:
1.43.
2.15.
1.90.
0.54.
Question 17 5 / 5 points
What is the importance of equity income to the analyst?
Question options:
Equity income includes the cash dividends a firm pays.
Equity income is taxed at a higher tax rate than normal earnings.
Equity income is income that is not received in cash.
Equity income is an extraordinary item.
Question 18 5 / 5 points
Which of the following assets CANNOT be impaired?
Question options:
Inventories
Goodwill
Pension liabilities
Property, plant and equipment
Question 19 5 / 5 points
The __________ helps the analyst see how the firm's decisions and activities over the course of an accounting period interact to produce an overall return to the firm's shareholders, the return on equity.
Question options:
Du Pont System
Du Shane System
Van Pont System
Harding System
Question 20 5 / 5 points
The following categories of ratios are used in financial statement analysis:
Liquidity, Operating Efficiency (also referred to as Activity), Leverage, Profitability, and Market Measures
Classify the following ratios according to these categories.
Question options:
Cash flow margin - liquidity; days inventory held - profitability
Cash flow margin - liquidity; days inventory held - leverage
Cash flow margin - profitability; days inventory held - leverage
Cash flow margin - profitability; days inventory held - liquidity
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