Question 1
1 out of 1 points
A horizontal analysis compares each amount with its base
amount for a selected base year.
True
False
Question 2
1 out of 1 points
Management is a user of financial analysis. Which of the
following comments does not represent a fair statement as to the management
perspective?
Management is not interested in the view of investors.
Management is interested in liquidity.
Management is interested in the debt position.
Management is interested in the financial structure of the
entity.
Question 3
1 out of 1 points
Which service includes over 800 different lines of business?
Annual Statement Studies
Standard & Poor’s Industry Surveys
Almanac of Business and Industrial Financial Ratios
Industry Norms and Key Business Ratios
Question 4
1 out of 1 points
Which service represents a compilation of corporate tax
return data?
Annual Statement Studies
Standard & Poor’s Industry Surveys
Almanac of Business and Industrial Financial Ratios
Industry Norms and Key Business Ratios
Question 5
1 out of 1 points
Which of the following statements is incorrect?
Comparison of income statement and balance sheet numbers, in
the form of ratios, should not be done.
Ratios are fractions expressed in percent or times per year.
A ratio can be computed from any pair of numbers.
A very long list of meaningful ratios can be derived.
Question 6
1 out of 1 points
Fremont Electronics has income of $ 1,000,000. Columbus
Electronics has income of $ 2,000,000. Which of the following statements is a statement?
Selected Answer:
Fremont Electronics could be more profitable than Columbus
Electronics in relation to resources employed.
Columbus Electronics is getting a higher return on assets
employed.
Columbus Electronics has higher profit margins than does
Fremont Electronics.
Fremont Electronics could be more profitable than Columbus
Electronics in relation to resources employed.
No comparison can be made between Fremont Electronics and
Columbus Electronics.
Question 7
1 out of 1 points
A figure from this year’s statement is compared with a base
selected from the current year.
Horizontal common- size statement
Vertical common- size statement
Funds statement
Balance sheet
Question 8
1 out of 1 points
Which of the following is a publication of the federal
government for manufacturing, mining, and trade corporations?
Standard & Poor’s Industry Surveys
Almanac of Business and Industrial Financial Ratios
Industry Norms and Key Business Ratios
The Department of Commerce Financial Report
Question 9
1 out of 1 points
Industry ratios should not be considered as absolute norms
for a given industry because of all but which of the following?
Many companies have varied product lines.
The financial services may be private independent firms.
The fiscal year- ends of the companies may differ.
Companies within the same industry may differ in their
method of operations.
Question 10
1 out of 1 points
Suppose you are comparing two firms in the coal industry.
Which type of numbers would be most meaningful for statement analysis?
Relative numbers would be most meaningful for both firms,
especially for interfirm comparisons.
Relative numbers are not meaningful.
Absolute numbers would be most meaningful.
It is not meaningful to compare two firms.
