Deck 8: Using Financial Statement Data

Question 1

XBRL is a global standard for internet communication mostly among day traders.

Answer 1

False

Question 2

Data analytics can help predict a company's revenue,earnings,and cash flow.

Answer 2

True

Question 3

When reporting financial statements,detailed tagging of the numbers included in the footnotes by use of XBRL tags is also required.

Answer 3

True

Question 4

Financial statement analysis is used by investors,analysts,auditors and other interested stakeholders to review and evaluate a company's financial statements and financial performance.

Question 5

The use of tags allows data to be slowly transmitted and received and it serves as an input into financial analysts valuing a company.It also contributes to an auditor finding areas where an error might occur,or regulators verifying if firms are in compliance with various regulations and laws (like SEC or IRS).

Question 6

In filing its financial statements with the SEC,a company must tag five basic financial statements,which include a balance sheet,income statement,statement of comprehensive income,statement of cash flows and statement of stockholder's equity.

Question 7

There are basically four types of ratios: Liquidity,activity,solvency (or financing)and profitability ratios.

Question 8

Information such as goodwill or long-term debt will likely change on a minute-by-minute basis in real-time financial reporting.

Question 9

The Securities and Exchange Commission mandates all publicly traded companies file financial statements prepared in accordance with U.S.GAAP.

Question 10

A major component of financial statement analysis is the use of ratio analysis.

Question 11

The two types of standardized financial accounting are IFRS and U.S.GAAP.

Question 12

The XBRL tag for cash is labeled Cash and is defined as follows: Amount of currency on hand as well as demand deposits with banks or financial institutions.

Question 13

Artificial intelligence,machine learning,and sentiment analysis are three methods used to analyze publicly traded companies on Nasdaq and the NYSE to gain insight and track companies' business and financial operations.

Question 14

Many financial reporting systems within enterprise systems have general ledgers that are consistent with XBRL called XBRL-GL.

Question 15

Defining over 19,000 elements,the 2017 US GAAP Financial Reporting Taxonomy tags unique financial data to a component within the taxonomy.

Question 16

XBRL stands for eXtensible Business Reporting Linguistic.

Question 17

Sometimes outside data vendors create standardized metrics to make the company reported XBRL data more comparable.

Question 18

The XBRL taxonomy helps define and describe each key data element (such as cash or employee spending).

Question 19

Once numbers are input into a financial system using XBRL-GL,they are already tagged and able to be transmitted on the next day of business to interested users.

Question 20

Ratio analysis is a tool used to evaluate relationships among different financial statement items to help understand a company's financial and operating performance.

Question 21

Which of the following statements is false?

A) Firms can make their own tags if they feel their financial data item does not fit within the existing framework.
B) Sometimes very similar financial data items have unique tags, making direct comparisons between companies difficult.
C) Detailed tagging of the numbers included in the footnotes is required.
D) XBRL uses a taxonomy to help define and describe each key data element, but it is not capable of defining relationships between each element.

Question 22

Using the table below compute ROE for Q3,2011 for DuPont (Ticker = DD).

A) 12.4%
B) 16.3%
C) 21.3%
D) 26.6%

Question 23

The authors discuss all of the following ways in which tags can serve as an input except:

A) regulators seeing if audit firms are in compliance with various regulations and laws.
B) regulators seeing if companies are in compliance with various regulations and laws.
C) financial analysts valuing a company.
D) an auditor finding areas where an error might occur.

Question 24

XBRL uses a ________ to help describe each key data element.

A) taxonomy
B) data dictionary
C) schema
D) terminology

Question 25

Activity ratios measure ________.

A) a firm's ability to pay short-term obligations using current assets
B) a firm's operating efficiency
C) a firm's ability to pay their debts and stay in business
D) a firm's ability to generate earnings relative expenses

Question 26

With regard to sparklines,which of the following statements is false?

A) Sparklines can allow financial statement users to easily see the data visually and give meaning to the underlying financial data.
B) Sparklines can be added to a digital dashboard that already has many charts and dials, without cluttering up the overall appearance of a dashboard.
C) Sparklines can, generally, fit in a single cell within a spreadsheet.
D) Sparklines can easily add to the data without detracting from the tabular results.

Question 27

XBRL is used for ________ and ________ financial elements.

A) organizing; defining
B) organizing; determining
C) obscuring; defining
D) obscuring; determining

Question 28

According to the authors,the use of tags allows data to be quickly ________.

A) cleaned and prepared
B) transformed and received
C) sorted and reconfigured
D) transmitted and received

Question 29

Using the table below compute profit margin for Q3,2011 for DuPont (Ticker = DD).

A) 22.0%
B) 31.5%
C) 30.9%
D) 23.6%

Question 30

Using the table below compute ROE for 2011 year-end for DuPont (Ticker = DD).

A) 149.2%
B) 70.8%
C) 84.9%
D) 142.9%

Question 31

Which of the following is not a type of tagging with XBRL?

A) years
B) figures
C) hieroglyphs
D) text

Question 32

Sparklines are generally ________ and show ________ trends.

A) small; similar
B) large; simple
C) small; simple
D) large; similar

Question 33

Liquidity ratios measure ________.

A) a firm's ability to pay short-term obligations using current assets
B) a firm's operating efficiency
C) a firm's ability to pay their debts and stay in business
D) a firm's ability to generate earnings relative expenses

Question 34

XBRL stands for ________ and is a type of ________.

A) eXtended Business Reporting Language; HTML
B) eXtended Business Reporting Language; XML
C) eXtensible Business Reporting Language; XML
D) eXtensible Business Reporting Language; HTML

Question 35

The Securities and Exchange Commission requires all public company filers to use XBRL tagging in all of the following financial statements except:

A) Balance Sheet
B) Statement of Comprehensive Income
C) Statement of Cash Flows
D) Statement of Changes in Working Capital

Question 36

Solvency ratios measure ________.

A) a firm's ability to pay short-term obligations using current assets
B) a firm's operating efficiency
C) a firm's ability to pay their debts and stay in business
D) a firm's ability to generate earnings relative expenses

Question 37

Profit margin is an example of which type of ratio?

A) solvency ratio
B) profitability ratio
C) liquidity ratio
D) activity ratio

Question 38

Using the table below compute operating leverage for Q3,2011 for DuPont (Ticker = DD).

A) 13.3%
B) 17.4%
C) 25.2%
D) 52.8%

Question 39

Profitability ratios measure ________.

A) a firm's ability to pay short-term obligations using current assets
B) a firm's operating efficiency
C) a firm's ability to pay their debts and stay in business
D) a firm's ability to generate earnings relative expenses

Question 40

According to the text,research finds that as the use of ________ words in the 10-k ________ the stock market reacts ________.

A) negative; decreases; negatively
B) negative; increases; negatively
C) positive; increases; negatively
D) positive; decreases; positively

Question 41

Return on equity is an example of which type of ratio?

A) solvency ratio
B) profitability ratio
C) liquidity ratio
D) activity ratio

Question 42

The quick ratio is an example of which type of ratio?

A) solvency ratio
B) profitability ratio
C) liquidity ratio
D) activity ratio

Question 43

Total assets turnover ratio is an example of which type of ratio?

A) solvency ratio
B) profitability ratio
C) liquidity ratio
D) activity ratio

Question 44

Inventory turnover ratio is an example of which type of ratio?

A) solvency ratio
B) profitability ratio
C) liquidity ratio
D) activity ratio

Question 45

Long-term debt to equity ratios are examples of which type of ratio?

A) solvency ratio
B) profitability ratio
C) liquidity ratio
D) activity ratio

Question 46

Accounts receivable turnover ratio is an example of which type of ratio?

A) solvency ratio
B) profitability ratio
C) liquidity ratio
D) activity ratio

Question 47

The current ratio divides total current assets by total current liabilities and is an example of which type of ratio?

A) solvency ratio
B) profitability ratio
C) liquidity ratio
D) activity ratio

Question 48

Debt-to-equity ratio is an example of which type of ratio?

A) solvency ratio
B) profitability ratio
C) liquidity ratio
D) activity ratio

Question 49

Return on assets is an example of which type of ratio?

A) solvency ratio
B) profitability ratio
C) liquidity ratio
D) activity ratio

Question 50

The acid-test ratio is an example of which type of ratio?

A) solvency ratio
B) profitability ratio
C) liquidity ratio
D) activity ratio