In looking for the success of WilliamsSonoma, Inc., should you just look at the net
income on the income statement?
1. Yes
2. No
50%
1
50%
2
Are there accounting tools to
help perform financial analysis?
1. Yes
2. No
50%
1
50%
2
Does the management of Williams-Sonoma, Inc.
also use financial analysis to evaluate
performance and develop strategies for the
company?
1. Yes
2. No
50%
1
50%
2
Is it possible to explain the change in the stock
price for Williams-Sonoma, Inc. through the
financial analysis of the company financial data?
1. Yes
2. No
50%
1
50%
2
Should you perform financial analysis for a
company only if you are deciding to invest in
the company?
1. Yes
2. No
50%
1
50%
2
The percentage analysis of increases and
decreases in related items in comparative financial
statements is called horizontal analysis.
1. True
2. False
50%
1
50%
2
The ability of a business to meet its financial
obligations (debts) is called turnover.
1. True
2. False
50%
1
50%
2
Quick assets are Cash and all
other fixed assets.
1. True
2. False
50%
1
50%
2
Profitability analysis focuses on the
relationship between operating results and
the resources available to a business.
1. True
2. False
50%
1
50%
2
Solvency analysis focuses on the ability of a
business to pay or otherwise satisfy the
returns expected by its stockholders.
1. True
2. False
50%
1
50%
2
The number of days’ sales in inventory is
calculated by multiplying average inventory
by the average daily cost of goods sold.
1. True
2. False
50%
1
50%
2
The price-earnings ratio is an indicator
of a firm’s future earnings prospects.
1. True
2. False
50%
1
50%
2
A type of analysis in which a percentage analysis is
used to show the relationship of each component to
the total within a single statement is called
25%
25%
25%
25%
1. ratio analysis
2. common size
analysis
3. vertical analysis
4. horizontal
analysis
1
2
3
4
An investor and/or stockholder will be
interested in a business that has the ability to
25%
25%
25%
25%
1. pay regular
dividends
2. pay obligations of
the business
3. survive over a long
period of time
4. all of these choices
1
2
3
4
The working capital of a business is
defined as
1.
2.
3.
4.
the excess of current
assets over current
liabilities
the excess of total
assets over current
liabilities
the excess of total
assets over total
liabilities
the excess of total
assets over
stockholders’ equity
25%
1
25%
2
25%
3
25%
4
Which of the following is not considered
a component of solvency analysis?
25%
25%
25%
25%
1. Current position
analysis
2. Rate earned on total
assets
3. Accounts receivable
analysis
4. Inventory analysis
1
2
3
4
Accounts Receivable Turnover is computed
by which of the following formulas?
1.
2.
3.
4.
Net sales multiplied by
total accounts
receivable
Net sales divided by
total accounts
receivable
Net sales multiplied by
average accounts
receivable
Net sales divided by
average accounts
receivable
25%
1
25%
2
25%
3
25%
4
To assess the efficiency in the management
of inventory, a business would use a(n)
25%
25%
25%
25%
1. current ratio
2. quick ratio
3. inventory turnover
ratio
4. working capital
ratio
1
2
3
4
Which of the following is not a measure
of the profitability of a business?
25%
25%
25%
25%
1. Earnings per share
on common stock
2. Working capital ratio
3. Rate earned on total
assets
4. Ratio of net sales to
assets
1
2
3
4
Public corporations are required to issue to
its stockholders and interested parties
25%
25%
25%
25%
1. annual reports
2. dividends
3. the personnel
policy
4. financial analysis
reports
1
2
3
4
Which one of the following is not a tool
in financial statement analysis?
25%
25%
25%
25%
1. Horizontal
analysis
2. Vertical analysis
3. Circular analysis
4. Analysis of
various ratios
1
2
3
4
Which of the following financial statements
would not be used to perform financial
analysis for a business?
25%
25%
25%
25%
1. Comparative
balance sheet
2. Comparative income
statement
3. Comparative
retained earnings
statement
4. Worksheet
1
2
3
4