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Chapter 15

Quiz by Julie Morris

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10 questions
Show answers
  • Q1
    The three main ways to analyze financial statements are horizontal analysis, vertical analysis, and ratio analysis.
    False
    True
    30s
  • Q2
    The vertical analysis is the study of percentage changes in line items from comparative financial statements.
    False
    True
    30s
  • Q3
    A business's ability to meet its short-term obligations with its current assets
    Current ratio
    Cash Ratio
    Working Capital
    Acid-test ratio
    30s
  • Q4
    The company's ability to pay current liabilities from cash and cash equivalents
    Current Ratio
    Acid-test ratio
    Cash ratio
    Working Capital
    30s
  • Q5
    The company's ability to pay all its current liabilities if they came due immediately
    Current ratio
    Cash ratio
    Working capital
    Acid-test ratio
    30s
  • Q6
    The company's ability to pay current liabilities from current assets
    Cash ratio
    Working capital
    Acid-test ratio
    Current ratio
    30s
  • Q7
    Current Assets - Current Liablities
    Cash ratio
    Acid-test ratio
    Current ratio
    Working Capital
    30s
  • Q8
    What is not a red flag in financial statement analysis
    Too much debt
    Increased cash flow
    Buildup of merchandise inventories
    Earnings problems
    30s
  • Q9
    One single ratio can tell the whole picture of any company's performance and it is the rate of return on total assets.
    False
    True
    30s
  • Q10
    These are all profitability ratios except
    Profit Margin Ratio
    Rate of Return on Total Assets
    Times-Interest-Earned ratio
    Asset Turnover Ratio
    30s

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