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Financial Reports: Evaluate financial reports Essay Sample

Financial Reports: Evaluate financial reports Pages
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1. The percentage of change in Property, Plant & Equipment (PP&E) between two balance sheet dates is an example of (Points : 1) vertical analysis.
solvency analysis.
profitability analysis.
horizontal analysis.

2. The percent of Current to Total Liabilities is an example of (Points : 1) vertical analysis.
solvency analysis.
profitability analysis.
horizontal analysis.

3. The number computed by subtracting current liabilities from current assets is: (Points : 1) working capital.
Net Income.
the Current Ratio.
gross income.

4. Which of the following is a measure of the liquid position of a corporation? (Points : 1) Earnings per share
Inventory turnover
Quick ratio
Number of times interest charges earned

5. Which of the following is included in the computation of the quick ratio? (Points : 1) Prepaid rent
Marketable securities
Inventory
Supplies

6. Which of the following is NOT included in the computation of the quick ratio? (Points : 1) Patents
Marketable securities
Accounts receivable
Cash

7. Which of the following ratios does NOT measure liquidity? (Points : 1) Inventory Turnover ratio
Working capital to total assets
Current ratio
Quick ratio

8. Which of the following ratios does NOT measure efficiency or activity of an entity? (Points : 1) Accounts receivable turnover
Age of accounts receivable
Net cash flow to current liabilities
EPS

9. The inventory turnover ratio (Points : 1)
measures management’s ability to productively employ all of its resources. measures the efficient use of assets held for resale. is a stringent measure of liquidity.
provides a measure of the strength of the sales mix the company currently employs.

10. Which of the following is correct regarding the rate of return on assets? (Points : 1) The rate of return on assets measures management’s ability to productively employ all its resources. The rate of return on assets measures the return on all assets used regardless of how the assets are financed. The rate of return on assets is a measure of profitability. All of the above are correct.

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