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Financial Accounting Ivy Software Exam Questions and Complete Solutions Graded A+.
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Financial Accounting Ivy Software Exam Questions and Complete Solutions Graded A+.
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Financial Accounting IvySoftware Exam Questions
and Complete Solutions
Graded A+
Denning [Date] [Course title]
,From a bankers perspective, the most important ratio on the customers financial statement is -
Answer: Current Ratio
Which of the following is an operating performance ratio?
Debt to total assets
Times interest earned
Payout ratio
Times interest earned and payout ratio
None - Answer: Times interest earned and Payout Ratio
Horizontal analysis compares the components of a balance sheet with a base item. T/F - Answer: False
Since companies have different numbers of shares outstanding, it is not useful to compare earnings per
share ratios. T/F - Answer: True
There are two ratios that help define the operating cycle. They are:
receivables and inventory turnover
receivables and accounts payable
inventory and accounts payable turnover
none of these - Answer: Receivables and accounts payable
The ratio that shows the markup in price over the cost of goods sold is
profit margins
, gross margin ratio
return on assets
asset turnover
none - Answer: Gross margin ratio
The ratio that shows how investors value the stock is
payout ratio
earnings per share
return on equity
return on assets
none - Answer: None
Financial strength ratios are utilized to help predict the long-run solvency of a company. T/F - Answer:
True
Ratio analysis is popular because ratios:
summarize important info
are useful in comparisons within a company over time
are useful in comparisons with other companies
all the above - Answer: All the above
ROE shows how much income was earned for every dollar invested by owners. T/F - Answer: True
A company's annual report is used primarily by the taxing authorities. T/F - Answer: True
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