Multiple Choice Questions 1. Which of the following types of analysis compares one corporation to another corporation
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1. Which of the following types of analysis compares one corporation to another corporation and to industry averages?
a. Cross sectional analysis
b. Time series analysis
c. timetable analysis
d. Company analysis
2. Which of the following types of analysis is particularly useful for trend analysis?
a. Vertical analysis
b. Timetable analysis
c. Trend-setting analysis
d. Horizontal analysis
3. Vertical analysis expresses each financial statement line item as a percent of:
a. The average statement amount
b. The smallest statement amount
c. The largest statement amount
d. The mean statement amount
4. Horizontal analysis expresses each financial statement line item as a percent of:
a. Net income
b. Total assets
c. Base year
d. Stockholders’ equity
5. How is the current ratio calculated?
a. Current Assets ÷ Current Liabilities
b. (Cash + Marketable Securities + Accounts Receivable) ÷ Current Liabilities
c. (Cash + Marketable Securities) ÷ Current Liabilities
d. Cash Flows from Operating Activities ÷ Current Liabilities
6. How is the cash ratio calculated?
a. Current Assets ÷ Current Liabilities
b. (Cash + Marketable Securities + Accounts Receivable) ÷ Current Liabilities
c. (Cash + Marketable Securities) ÷ Current Liabilities
d. Cash Flows from Operating Activities ÷ Current Liabilities
7. A firm’s quick ratio is typically computed as follows:
a. Total Liabilities = Total Assets
b. (Cash + Short-Term Investments + Receivables) ÷ Current Liabilities
c. Current Liabilities ÷ Current Assets
d. Current Assets ÷ Current Liabilities
8 What ratio is used to measure a firm’s liquidity?
a. Debt ratio
b. Asset turnover
c. Current ratio
d. Return on equity
Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio. Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen
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