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Question 1 of 20 5.0 Points An analytical tool that measures a companys performance against a predetermined standard is a: A. benchmark comparison analysis. B. common size statement. C. profitability analysis. D. time-series analysis. Reset Selection Mark for Review Whats This?Question 2 of 20 5.0 Points Which of the following is the first step that an informed financial analyst should take to mitigate distortions caused by GAAP or managements selection of accounting choices? A. Careful evaluation of the companys ratios B. Careful evaluation of the reporting methods used by a company as reported in the footnote disclosures C. Careful examination of the auditors opinion D. Careful examination of the year-end worksheet Reset Selection Mark for Review Whats This?Question 3 of 20 5.0 Points Refer to Table 3-1. In a common size income statement for Year 3, the cost of goods sold is expressed as: A. 40.0%. B. 66.4%. C. 100.0%.

D. 250.0%. Reset Selection Mark for Review Whats This?Question 4 of 20 5.0 Points Refer to Table 3-1. In a trend income statement for Year 5, where Year 3 is the base year, sales for Year 5 are expressed as: A. 84.4%. B. 100.0%. C. 118.5%. D. 148.7%. Reset Selection Mark for Review Whats This?Question 5 of 20 5.0 Points Interest is removed from Net Operating Profit After Taxes (NOPAT) because it: A. enhances the Return on Assets (ROA) of companies that utilize high levels of debt. B. is an expense that is not deductible from income taxes. C. is related to the method of financing the company instead of measuring performance. D. lowers the Return on Assets (ROA) of companies that utilize high levels of equity financing. Reset Selection Mark for Review Whats This? Question 6 of 20 5.0 Points A company that desires superior performance in its industry would choose which one of the following strategy pairs? (Not 100% sure) A. Market segmentation and low-cost leadership B. Niche marketing and market segmentation C. Price leadership and product differentiation D. Product differentiation and low-cost leadership Reset Selection Mark for Review Whats This?Question 7 of 20 5.0 Points Which one of the following statements is probably the most useful source of information when analyzing a company credit risk? A. Balance Sheet B. Income Statement C. Statement of Cash Flows D. Statement of Changes in Stockholders Equity Reset Selection Mark for Review Whats This?Question 8 of 20 5.0 Points Short-term liquidity problems arise because of: A. disparity of cash inflows and cash outflows. B. excessive interest rates. C. lack of long-term financing. D. poor profitability. Reset Selection Mark for Review Whats This? Question 9 of 20 5.0 Points The Poff Company buys from suppliers on a net 90 day basis, experiences an Accounts Receivable Turnover of 12 times, and has an Inventory Turnover of 8 times. Cash inflows and outflows are: A. evenly matched. B. negatively mismatched by 14 days. C. negatively mismatched by 76 days.

D. positively mismatched by 14 days. Reset Selection Mark for Review Whats This?Question 10 of 20 5.0 Points Refer to Table 3-2 to answer Questions 10 through 20. What is the return on assets ratio for year 2? A. 16.2% B. 16.8% C. 17.6% D. 18.1% Reset Selection Mark for Review Whats This?Question 11 of 20 5.0 Points What is the operating profit margin for year 2? A. 7.8% B. 8.1% C. 8.4% D. 16.2% Reset Selection Mark for Review Whats This?Question 12 of 20 5.0 Points What is the current ratio for year 2? A. 1.4 to 1 B. 2.0 to 1 C. 2.7 to 1 D. 3.0 to 1 Reset Selection Mark for Review Whats This?Question 13 of 20 5.0 Points What is the quick ratio for year 2? A. 1.1 to 1 B. 1.4 to 1 C. 1.6 to 1 D. 2.7 to 1 Reset Selection Mark for Review Whats This?Question 14 of 20 5.0 Points What is the accounts receivable turnover for year 2? A. 2.0 times B. 6.1 times C. 6.6 times D. 7.1 times Reset Selection Mark for Review Whats This?Question 15 of 20 5.0 Poin ts Calculate the days receivables outstanding for year 2. A. 49 days B. 55 days C. 60 days D. 183 days Reset Selection Mark for Review Whats This?Question 16 of 20 5.0 Points The inventory turnover for year 2 is __________ times. A. 2.61

B. 3.12 C. 3.45 D. 3.80 Reset Selection Mark for Review Whats This?Question 17 of 20 5.0 Points The days inventory held for year 2 is __________ days. A. 96 B. 106 C. 116 D. 138 Reset Selection Mark for Review Whats This?Question 18 of 20 5.0 Points If the intangible assets in year 2 are $100,000, the long-term debt to tangible assets for year 2 is: A. 10.0%. B. 20.2%. C. 30.7%. D. 42.6%. Reset Selection Mark for Review Whats This?Question 19 of 20 5.0 Points The interest coverage for year 2 is __________ times. A. 12.8 B. 13.8 C. 20.5 D. 21.5 Reset Selection Mark for Review Whats This?Question 20 of 20 5.0 Points If there is no preferred stock, what is the return on common equity for year 2? A. 25.8% B. 27.9% C. 41.4% D. 43.4% Reset Selection <>

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