21) Common-size financial statements represent a form of:
A) ratio analysis
B) vertical analysis
C) trend analysis
D) horizontal analysis
22) Which of the following would be most likely to reveal that net income represented 7% of total net sales in 2011, but only 4% in 2010?
A) common-size financial statements
B) horizontal analysis
C) trend analysis
D) ratio analysis
23) Analyzing the cash flow statement may help analysts determine the financial health of a company. Which of the following signs below is
not
an indicator of a financially healthy company?
A) The company's operations are a major source (not a use) of cash.
B) The company's operations are a major use (not a source) of cash.
C) The company's investing activities include more purchases than sales of long-term assets.
D) The company's financing activities are not dominated by borrowing.
24) The current ratio is calculated as:
A) total assets / total liabilities
B) current assets / total liabilities
C) current assets × current liabilities
D) current assets / current liabilities
25) Working capital is defined as:
A) current liabilities - current assets
B) current assets - current liabilities
C) total assets - total liabilities
D) current assets + current liabilities
26) Total revenues and net income for 2010 for Tiger-Cat Corporation is $3,000,000 and $200,000, respectively. Tiger-Cat Corporation has had 400,000 common shares of stock outstanding for all of 2010. The selling price of Tiger-Cat Corporation common shares on December 31, 2010, is $15. Earnings per share for 2010 is:
A) $30.00
B) $7.50
C) $7.00
D) $0.50
27) Assume a company has a current ratio of 1.5 and working capital equal to $25,000. If the company's current liabilities are equal to $50,000, its total current assets are:
A) $7,500
B) $25,000
C) $75,000
D) $37,500
28) Which of the following is
not
included in the calculation of the numerator in the acid-test ratio?
A) prepaid expenses and inventory
B) cash and prepaid expenses
C) inventory and net current receivables
D) short-term investments and net current receivables
29) Inventory turnover is calculated as:
A) average inventory for the period / cost of goods sold
B) cost of goods sold / average inventory for the period
C) gross margin for the period / average inventory for the period
D) average inventory for the period / gross margin for the period
30) If the ending inventory balance was overstated on the financial statements and the beginning inventory balance was understated, but all other items were properly reported, the calculated inventory turnover ratio would be:
A) too high
B) too low
C) indeterminable with the information given
D) unaffected by these errors