Question Multiple Choice Question 25 The three different perspectives on financial statement analysis are those of the: manager, regulator, and bondholder. manager, shareholder, and creditor. regulator, shareholder, and creditor. shareholder, creditor, and regulator Multiple Choice Question 26 Shareholders analyze financial statements in order to: assess the cash flows that the firm will generate from its operations. focus on the value of the stock they hold. determine the firm’s profitability, their return for that period, and the dividend they are likely to receive all of these. Multiple Choice Question 27 The creditors of a firm analyze financial statements so that they can focus on: the firm’s amount of debt. the firm’s ability to generate sufficient cash flows to meet its legal obligations first and still have sufficient cash flows to meet debt repayment and interest payments. the firm’s ability to meet its short-term obligations. all of these. Multiple Choice Question 32 Which of the following is NOT true of common-size income statements? Income statement accounts are represented as percentages of net sales. Each income statement item is standardized by dividing it by net sales. Common-size income statements analysis is a specialized application of ratio analysis. Each income statement item is standardized by dividing it by total assets. Multiple Choice Question 33 Common-size financial statements: are a specialized application of ratio analysis. allow us to make meaningful comparisons between the financial statements of two firms that are different in size. are prepared by having each financial statement item expressed as a percentage of some base number, such as total assets or total revenues. all of these are true. Multiple Choice Question 34 Which of the following is a benefit of a common-size income statement? It reveals a great deal of information about the adequacy of a firms net working capital. It is very useful to assess how effectively a firm collected its accounts receivable. It can tell the analyst a great deal about a firms efficiency and profitability. It reveals how effectively a firm has increased its assets. Multiple Choice Question 47 Lionel, Inc., has current assets of $623,122, including inventory of $241,990, and current liabilities of $378,454.What is the quick ratio? (Round your final answer to two decimal places . ) 1.65 0.64 1.01 None of these Multiple Choice Question 52 If Viera, Inc., has an accounts receivable turnover of 3.9 times and net sales of $3,436,812, what is its level of receivables? (Round your final answer to the nearest dollar.) $1,340,357 $81,234 $881,234 $13,403,567 3,436,812 / 3.9 = 881,234 Multiple Choice Question 57 Trident Corp., has debt of $3.35 million with an interest rate of 6.875 percent. The company has an EBIT of $2,766,009. What is its times-interest-earned ratio? (Round your final answer to nearest number.) 13 times 12 times 11 times None of these Multiple Choice Question 58 Sectors, Inc . , has an EBIT of $7,221,643 and interest expense of $611,800 . Its depreciation for the year is $1,434,500. What is its cash coverage ratio? (Round your final answer to two decimal places.) 15.42 times 18.34 times 14.15 times None of these Multiple Choice Question 63 RTR Corp. has reported a net income of $812,425 for the year. The company’s share price is $13.45, and the company has 312,490 shares outstanding. Compute the firm’s price-earnings ratio. (Round your final answer to two decimal places.) 4.87 times 8.12 times 5.17 times None of these Multiple Choice Question 69 Why is the quick ratio considered by some to be a better measure of liquidity than the current ratio? The current ratio does not include accounts receivable. It measures how “quickly” cash flows through the firm. The quick ratio more accurately reflects a firm’s profitability. It omits the least liquid current asset from the numerator of the ratio Multiple Choice Question 72 Which of the followi…
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