30 Dec Suppose you are comparing

Question 1

1 out of 1 points

A horizontal analysis compares each amount with its base amount for a selected base year.

True

False

Question 2

1 out of 1 points

Management is a user of financial analysis. Which of the following comments does not represent a fair statement as to the management perspective?

Management is not interested in the view of investors.

Management is interested in liquidity.

Management is interested in the debt position.

Management is interested in the financial structure of the entity.

Question 3

1 out of 1 points

Which service includes over 800 different lines of business?

Annual Statement Studies

Standard & Poor’s Industry Surveys

Almanac of Business and Industrial Financial Ratios

Industry Norms and Key Business Ratios

Question 4

1 out of 1 points

Which service represents a compilation of corporate tax return data?

Annual Statement Studies

Standard & Poor’s Industry Surveys

Almanac of Business and Industrial Financial Ratios

Industry Norms and Key Business Ratios

Question 5

1 out of 1 points

Which of the following statements is incorrect?

Comparison of income statement and balance sheet numbers, in the form of ratios, should not be done.

Ratios are fractions expressed in percent or times per year.

A ratio can be computed from any pair of numbers.

A very long list of meaningful ratios can be derived.

Question 6

1 out of 1 points

Fremont Electronics has income of $ 1,000,000. Columbus Electronics has income of $ 2,000,000. Which of the following statements is a statement?

Selected Answer:

Fremont Electronics could be more profitable than Columbus Electronics in relation to resources employed.

Columbus Electronics is getting a higher return on assets employed.

Columbus Electronics has higher profit margins than does Fremont Electronics.

Fremont Electronics could be more profitable than Columbus Electronics in relation to resources employed.

No comparison can be made between Fremont Electronics and Columbus Electronics.

Question 7

1 out of 1 points

A figure from this year’s statement is compared with a base selected from the current year.

Horizontal common- size statement

Vertical common- size statement

Funds statement

Balance sheet

Question 8

1 out of 1 points

Which of the following is a publication of the federal government for manufacturing, mining, and trade corporations?

Standard & Poor’s Industry Surveys

Almanac of Business and Industrial Financial Ratios

Industry Norms and Key Business Ratios

The Department of Commerce Financial Report

Question 9

1 out of 1 points

Industry ratios should not be considered as absolute norms for a given industry because of all but which of the following?

Many companies have varied product lines.

The financial services may be private independent firms.

The fiscal year- ends of the companies may differ.

Companies within the same industry may differ in their method of operations.

Question 10

1 out of 1 points

Suppose you are comparing two firms in the coal industry. Which type of numbers would be most meaningful for statement analysis?

Relative numbers would be most meaningful for both firms, especially for interfirm comparisons.

Relative numbers are not meaningful.

Absolute numbers would be most meaningful.

It is not meaningful to compare two firms.