Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
16Activity
0 of .
Results for:
No results containing your search query
P. 1
Financial Ratio Analysis-kairus Model

Financial Ratio Analysis-kairus Model

Ratings: (0)|Views: 6,198|Likes:
Published by ztr1k3r

More info:

Published by: ztr1k3r on Jul 14, 2010
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOC, PDF, TXT or read online from Scribd
See more
See less

04/21/2013

pdf

text

original

 
FINANCIAL RATIO ANALYSIS1. Which of the following is true about the impact of price inflation on financial ratioanalysis?a.Inflation has no impact on financial ration analysis b.Inflation affects financial ratio analysis for one enterprise over time but notcomparative analysis of enterprises of different pages.c.Inflation affects financial ratio analysis for one enterprise overtime, as well ascomparative analysis of enterprises of different ages.d.Inflation affects comparative analysis of enterprises of different ages but notfinancial ratio analysis for enterprise over time2. When using common size statementsa.Data may be selected for the same business as of different dates, or for two or more business as of the same date. b.relationships should be stated in term of ratiosc.peso changes are reported over a period of at least three yearsd.All of the above are correct3. A useful tool in financial statement analysis is the common-size financial statements.What does this tool enable the financial analyst to do?a.Evaluate financial statements of companies within a given industry of approximately the same value. b.Determine which companies in the same industry are at approximately the samestage of development.c.Compare the mix of assets, liabilities, capital, revenue and expenses within acompany over time or between companies within a given industry without respectto relative size.d.Ascertain the relative potential of companies of similar size in different industries.4. Which of the following financial statements best describes the use of financialstatement analysis?a.Financial statement analysis techniques are merely guides to interpretation of financial data. b.Financial statement analysis can eliminate the risk in investment decision.c.Measurements for a specific company should be compared only with data from past periods.d.All of the above are correct.
 
5. In comparing the current ratios of two companies, why is it invalid to assume that thecompany with the higher current ratio is better company?a.The current ratio includes assets other than cash. b.A high current ratio may indicate inadequate inventory on hand.c.A high current ratio may indicate inefficient use of various assets and liabilities.d.the two companies may define working capital in different terms.6. Kairus Corporation had a current ratio of 2.0 at the end of 2007. Current assets andcurrent liabilities increased by equal amounts during 2008. The effects on net workingcapital and on the current ratio, respectively, were,a.no effect, increase b.increase, increasec.no affect, decreased.decrease, decrease7. Which of the following ratios does not measure liquidity?a.Net cash flow to current liabilities b.Current ratioc.Working capital to total assetsd.Quick ratio8. Pulse Company wrote off a P800 uncollectible account receivable against theallowance for doubtful accounts with a balance of P 2,100. The current ratio after thewrite off of the uncollectible accountsa.would be less than before the write-off of the account. b.would be greater than before the write off of the account.c.would be the same as before the write off the account.d.cannot be determined with the information given.9. How would the quick ratio be affected by a prepayment of P 30,000 for fire andliability insurance?a.The quick ratio would increase. b.The quick ratio would decrease.c.The quick ratio would change.d.The effect cannot be determined from the information given.10. Which of the following is true regarding the debt to equity ratio?a.The debt equity ratio is a stringent measure of liquidity b.The debt to equity ratio measures the productivity and desirability of the equityinvestment.c.The debt to equity ratio measures the management’s ability to productivelyemploy all its resources.d.The debt to equity ratio measures the capital structure of the entity.
 
11. Which of the following is not correct regarding the rate of return on assets?a.The rate of return of assets measures management’s ability to productivelyemploy all its resources. b.The rate of return on assets measures all the return on all assets used regardless of how the assets are financed.c.The rate of return on assets is a measure of profitability.d.The rate of return on assets measures the rate of return on the investment made bythe owners of the entity.12. Which of the following ratios would not be affected by the choice of depreciationmethod.a.Price-earning ratio b.Debt to equity ratioc.Earning per share of common stock d.Working capital turnove13. Expenses per peso of sales are indications of a.Operating efficiency b.Operating ratioc.Equity ratiod.leverage14. A high inventory turnover indicates thata.A relatively big amount of inventory is being carried in relation to sales b.a relatively small amount of inventory is being carried in relation to salesc.Slow moving or obsolete goods are included in the inventoryd.Answer not given15. A firm financial risk is a function of how it manages and maintains its debt. Whichone of the following sets of ratios characterizes the enterprise with greatest amount of financial risk?a.High debt-to-equity ratio, high interest coverage ratio, stable return on equity. b.Low debt-to-equity ratio, low interest coverage ratio, volatile return on equity.c.High debt-to-equity ratio, low interest coverage ratio, volatile return on equity.d.Low debt-to-equity ratio, high interest coverage ratio, stable return on equity16. Which of these ratios are measures of a company’s profitability?1. Earnings per share5. Return on assets2. Current ratio6. Inventory turnove3. Returns on sales7. Receivables turnove4. Debt-equity ratio8. Price-earning ratioa. All eight ratios.c. 1,3,5,6,7 and 8 onlyb. 1,3,5, and 8 onlyd. 1,3 and 6 only

Activity (16)

You've already reviewed this. Edit your review.
1 hundred reads
1 thousand reads
bnguyen8 liked this
Ellie Gally liked this
9s9c8r0i1bd liked this
notnull991 liked this
Kristin Klimesh liked this
Anbang Xiao liked this
Britney Deckard liked this

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->