Question 1

Match each of the following terms with the appropriate definitions.
-A company's ability to generate future revenues and meet long-term obligations.

Accepted Answer

Solvency refers to a company's ability to generate future revenues and meet long-term obligations, indicating its financial health over the long term.

Question 2

Match each of the following terms with the appropriate definitions.
-The comparison of a company's financial condition and performance to a base amount.

Accepted Answer

The answer of Match each of the following terms with...

Question 3

Match each of the following terms with the appropriate formulas.
-$\frac{\text { Net sales }}{\text { Average total assets }}$

Accepted Answer

The formula $\frac{\text{Net sales}}{\text{Average total assets}}$ is used to calculate the Total Asset Turnover, which measures how efficiently a company uses its assets to generate sales.

Question 4

Match the financial analysis building block most appropriately associated with each ratio. Each building block may be used more than once.
-Accounts Receivable Turnover

Accepted Answer

Accounts Receivable Turnover is associated with Liquidity and Efficiency as it measures how quickly a company can convert its accounts receivable into cash over a period.

Question 5

Match the financial analysis building block most appropriately associated with each ratio. Each building block may be used more than once.
-Days' Sales in Inventory

Accepted Answer

Days' Sales in Inventory is a measure of how efficiently a company manages its inventory and is related to liquidity and efficiency, indicating how quickly inventory is sold and replaced.

Question 6

Match each of the following terms with the appropriate formulas.
-$$\frac { \text { Accounts receivable } } { \text { Net sales } }$$ * 365

Accepted Answer

The formula $\frac { \text { Accounts receivable } } { \text { Net sales } }$ * 365 calculates the Days' sales uncollected, which measures the average number of days it takes a company to collect its accounts receivable.

Question 7

Match each of the following terms with the appropriate formulas.
-$\frac {\text {  Income before interest expense and income taxes
}} { \text { Interest expense} }$

Accepted Answer

The formula $\frac {\text { Income before interest expense and income taxes }} { \text { Interest expense }}$ is used to calculate the Times Interest Earned ratio, which measures a company's ability to meet its interest obligations.

Question 8

Match each of the following terms with the appropriate formulas.
-$$\frac { \text { Net income } } { \text { Net sales } }$$

Accepted Answer

The formula $\frac { \text { Net income } } { \text { Net sales } }$ is used to calculate the Profit Margin Ratio, which measures how much out of every dollar of sales a company actually keeps in earnings.

Question 9

Match each of the following terms with the appropriate formulas.
-$\frac {\text {  Ending inventory}} { \text {Cost of goods sold } }$

* 365

Accepted Answer

The formula $\frac {\text {Ending inventory}} {\text {Cost of goods sold}}$ is used to calculate the Days' sales in inventory, which measures the average number of days a company holds inventory before selling it.

Question 10

Match each of the following terms with the appropriate formulas.
-$\frac {\text {Cost of goods sold  }} { \text {Average inventory } }$

Accepted Answer

The formula $\frac {\text{Cost of goods sold}}{\text{Average inventory}}$ is used to calculate the Inventory turnover, which measures how many times a company's inventory is sold and replaced over a period.

Question 11

Match each of the following terms with the appropriate formulas.
-$\frac {\text {  Net income - Preferred dividends}} { \text { Average common stockholders' equity} }$

Accepted Answer

The formula $\frac {\text {Net income - Preferred dividends}} { \text {Average common stockholders' equity}}$ is used to calculate the Return on Common Stockholders' Equity. This ratio measures the profitability of a company from the common shareholders' perspective, excluding the impact of preferred dividends.

Question 12

Match each of the following terms with the appropriate definitions.
-The availability of resources to meet short-term obligations and to efficiently generate revenues.

Accepted Answer

Liquidity and efficiency refer to a company's ability to meet its short-term obligations and efficiently generate revenues. This involves managing current assets and liabilities to ensure that the company can cover its short-term debts and continue operating effectively.

Question 13

Match each of the following terms with the appropriate formulas.
-$\frac {\text {Annual cash dividends per share  }} { \text {Market price per share } }$

Accepted Answer

The formula for Dividend Yield is $\frac {\text {Annual cash dividends per share  }} { \text {Market price per share } }$, which matches choice E.

Question 14

Match each of the following terms with the appropriate formulas.
-$$\begin{array} { c } 
\text { Net sales - Cost of } \
\text { goods sold } \
\hline \text { Net sales }
\end{array}$$

Accepted Answer

The formula "Net sales - Cost of goods sold" calculates the gross margin, which is why the correct match is the Gross Margin Ratio (H). This ratio measures the percentage of net sales remaining after subtracting the cost of goods sold, indicating the efficiency of a company in managing its production and distribution costs relative to its net sales.

Question 15

Match each of the following terms with the appropriate definitions.
-A statement where each amount is expressed as a percent of a base amount to reveal the relative importance of each financial statement item.

Accepted Answer

A common-size financial statement is a type of financial statement where each line item is expressed as a percentage of a base amount, allowing for easy comparison of financial data across different periods or companies.

Question 16

Match the financial analysis building block most appropriately associated with each ratio. Each building block may be used more than once.
-Dividend Yield

Accepted Answer

Dividend Yield is most appropriately associated with Market Prospects because it provides investors with an indication of the income generated from an investment in a stock, relative to its market price, which is a key aspect of evaluating a company's future growth and investment appeal.

Question 17

Match each of the following terms with the appropriate formulas.
-$\frac {\text { Total liabilities  }} { \text { Total assets} }$

Accepted Answer

The debt ratio is calculated by dividing total liabilities by total assets, which measures the proportion of a company's assets that are financed by debt.

Question 18

Match each of the following terms with the appropriate definitions.
-Examination of financial data across time.

Accepted Answer

Horizontal analysis involves the examination of financial data across time, comparing line items in financial statements from one period to the next to identify trends or changes.

Question 19

Match the financial analysis building block most appropriately associated with each ratio. Each building block may be used more than once.
-Price Earnings Ratio

Accepted Answer

The Price Earnings Ratio is most appropriately associated with Market Prospects as it reflects investors' expectations of a company's future earnings and growth potential.

Question 20

Match each of the following terms with the appropriate definitions.
-A company's ability to provide financial rewards sufficient to attract and retain capital.

Accepted Answer

Profitability refers to a company's ability to generate sufficient financial rewards to attract and retain capital.

Quiz 13: Analysis of Financial Statements

Match each of the following terms with the appropriate definitions. -A company's ability to generate future revenues and meet long-term obligations.

Match each of the following terms with the appropriate definitions. -The comparison of a company's financial condition and performance to a base amount.

Match each of the following terms with the appropriate formulas. - $\frac{\text { Net sales }}{\text { Average total assets }}$

Match the financial analysis building block most appropriately associated with each ratio. Each building block may be used more than once. -Accounts Receivable Turnover

Match the financial analysis building block most appropriately associated with each ratio. Each building block may be used more than once. -Days' Sales in Inventory

Match each of the following terms with the appropriate formulas. - $\frac { \text { Accounts receivable } } { \text { Net sales } }$ * 365

Match each of the following terms with the appropriate formulas. - $\frac {\text { Income before interest expense and income taxes}} { \text { Interest expense} }$

Match each of the following terms with the appropriate formulas. - $\frac { \text { Net income } } { \text { Net sales } }$

Match each of the following terms with the appropriate formulas. - $\frac {\text { Ending inventory}} { \text {Cost of goods sold } }$ * 365

Match each of the following terms with the appropriate formulas. - $\frac {\text {Cost of goods sold }} { \text {Average inventory } }$

Match each of the following terms with the appropriate formulas. - $\frac {\text { Net income - Preferred dividends}} { \text { Average common stockholders' equity} }$

Match each of the following terms with the appropriate definitions. -The availability of resources to meet short-term obligations and to efficiently generate revenues.

Match each of the following terms with the appropriate formulas. - $\frac {\text {Annual cash dividends per share }} { \text {Market price per share } }$

Match each of the following terms with the appropriate formulas. - $\begin{array} { c } \text { Net sales - Cost of } \\\text { goods sold } \\\hline \text { Net sales }\end{array}$

Match each of the following terms with the appropriate definitions. -A statement where each amount is expressed as a percent of a base amount to reveal the relative importance of each financial statement item.

Match the financial analysis building block most appropriately associated with each ratio. Each building block may be used more than once. -Dividend Yield

Match each of the following terms with the appropriate formulas. - $\frac {\text { Total liabilities }} { \text { Total assets} }$

Match each of the following terms with the appropriate definitions. -Examination of financial data across time.

Match the financial analysis building block most appropriately associated with each ratio. Each building block may be used more than once. -Price Earnings Ratio

Match each of the following terms with the appropriate definitions. -A company's ability to provide financial rewards sufficient to attract and retain capital.

Quiz 13: Analysis of Financial Statements

Match each of the following terms with the appropriate definitions. -A company's ability to generate future revenues and meet long-term obligations.

Match each of the following terms with the appropriate definitions. -The comparison of a company's financial condition and performance to a base amount.

Match each of the following terms with the appropriate formulas. - Net sales Average total assets \frac{\text { Net sales }}{\text { Average total assets }} Average total assets Net sales ​

Match the financial analysis building block most appropriately associated with each ratio. Each building block may be used more than once. -Accounts Receivable Turnover

Match the financial analysis building block most appropriately associated with each ratio. Each building block may be used more than once. -Days' Sales in Inventory

Match each of the following terms with the appropriate formulas. - Accounts receivable Net sales \frac { \text { Accounts receivable } } { \text { Net sales } } Net sales Accounts receivable ​ * 365

Match each of the following terms with the appropriate formulas. - Income before interest expense and income taxes Interest expense\frac {\text { Income before interest expense and income taxes}} { \text { Interest expense} } Interest expense Income before interest expense and income taxes​

Match each of the following terms with the appropriate formulas. - Net income Net sales \frac { \text { Net income } } { \text { Net sales } } Net sales Net income ​

Match each of the following terms with the appropriate formulas. - Ending inventoryCost of goods sold \frac {\text { Ending inventory}} { \text {Cost of goods sold } }Cost of goods sold Ending inventory​ * 365

Match each of the following terms with the appropriate formulas. - Cost of goods sold Average inventory \frac {\text {Cost of goods sold }} { \text {Average inventory } }Average inventory Cost of goods sold ​