Financial Statement analysis Self Test Chapter 13

A detailed annual report, consisting of audited financials and in-depth information about the company, its key officers and employees , that is submitted annually to the S E C is called a

10k

If a company's stock is selling for 60 and its earnings per share is 3, the its price earning Ratio (PE Ratio) is

20

An inventory Turnover of 4 times means the company probably has inventory on hand equal to

3 month's sales

Net Credit sales divided by average accounts receivable is:

Accounts receivable turnover

Inventory Turnover is calculated by dividing "Average Inventory" into

Cost of goods sold

In an annual report, an auditor's opinion applies to the four formal financial statements, the supporting notes to the financials and the financial forecasts.

False, no forecasts

The Type of Balance Sheet and Income Statement analysis that shows for each line item, the dollar amount and percentage increase or decrease from one year to the next is called

Horizontal analysis

When converting an Income statement to percentages by the vertical analysis method, the 100% figure is always:

Net Sales

In an Annual Report, Social Responsibility Statements would most likely be found in the:

President's letter to the stockholders

When converting a Balance sheet to percentages by the Vertical methodm the 100% figure is always:

Total assets

An "unusual and infrequent" natural disaster would be reported on the income statement as an "Extraordinary Item"?

True

Current Assets divided by current liabilities is called the current ratio

True

Current Assets minus current liabilities is called working capital

True

Free Cash Flow is the Total cash flow from the cash flow report less capital expenditures and less cash dividends

True

Payout Ratio is calculated as Cash Dividends paid on common stock divided by net Income

True

When an auditor's opinion contains the words "except for " or "subject to" , the opinion is said to be "qualified"

True