31.Managers that structure financing transactions and choose accounting methods that exclude debt on the company’s balance sheet are using
a.hidden reserves.
b.fraudulent methods by default.
c.performance overstatement.
d.off-balance-sheet financing.
32.Information concerning industry averages will likely be found in
a.Barron’s.
b.The Wall Street Journal.
c.Dun & Bradstreet's Key Business Ratios.
d.The New York Times.
33.Common-size financial statements are expressed as
a.percentages of other numbers on the same statements.
b.a percent comparison of other companies in the same industry.
c.a common way of preparing certain types of financial statements.
d.percentages of increases and decreases compared to the previous accounting period.
34.The primary measure of the overall success of a company is
a.total shareholders' equity.
b.total assets.
c.net income.
d.the number of shares of stock it has sold to investors.
35.Many ratios require an average be used for the balance sheet numbers because the
a.income statement refers to a point in time.
b.accountants may have made errors in the financial statements.
c.balance sheet numbers are a point in time and are being compared to an income statement number that covers a period of time.
d.income statement numbers represent a point in time and are being compared to a balance sheet number that covers a period of time.
36.Using borrowed funds to generate returns for the shareholders is called
a.leverage.
b.profitability.
c.taking a bath.
d.solvency.
37.A company that reports high levels of common equity leverage is probably
a.reporting higher earnings per share than other companies in the same industry.
b.meeting its financing needs effectively.
c.using leverage very effectively.
d.demonstrating it has a large amount of off-balance-sheet financing.
38.The item that causes the greatest and most immediate effect on a company’s stock price will generally be
a.cash on hand.
b.the company's solvency.
c.profits.
d.dependent upon the industry in which the company operates.
39.Investors who use accounting information to guide trading in foreign securities
a.should carefully compare expenses, but not revenues to companies in the same industry in the United States.
b.must adjust the numbers of foreign-based companies’ financial statements and thoroughly understand the foreign environment.
c.must contact the foreign CEO before any investment in stock occurs.
d.should contact the foreign company’s auditors to find out how much dividends will be paid.
40The DuPont model is
a.a method of off-balance sheet financing.
b.a framework to analyze ROE changes and identify value drivers.
c.a method of preparing a balance sheet.
d.a solvency calculation.