01 Jan Only managers use financial

Question 1

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Absolute figures usually have more meaning than ratio comparisons.

Question 2

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In order to determine the meaning of a ratio, some kind of comparison, such as an industry average or trend analysis, is helpful.

Question 3

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Typically, the largest expense to a manufacturing firm is cost of goods sold.

Question 4

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Liquidity ratios measure the degree of protection of long-term suppliers of funds.

Question 5

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The ideal way to compare income statement figures, such as sales, to balance sheet figures, such as receivables, is to use a measure of the average for the balance sheet figures.

Question 6

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Different accounting methods can cause some ratios to differ substantially.

Question 7

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The descriptive information in annual reports is not useful in statement analysis; only the financial statements themselves are of value.

Question 8

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In the set of numbers below, the median is 4:

Question 9

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Only managers use financial analysis tools.

Question 10

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Financial statement analysis is a judgmental process.