Question 1

Return on sales is the percentage created when sales are divided into gross margin.

Accepted Answer

A) True 
 B)False

Question 2

A business's operating ratios are computed by ________.

Accepted Answer

A)  Expense/sales
B)  Cost of goods sold/sales
C)  Income/sales
D)  Expense/cost of goods sold
E)  None of the above

Question 3

If cash has decreased from $10,000 to $8000 on the balance sheet,it means the company is doing poorly.

Accepted Answer

A) True 
 B)False

Question 4

Return on Sales (ROS) is also called a(n) ________.

Accepted Answer

A)  Profit margin
B)  Operating margin
C)  Contribution margin
D)  Gross margin
E)  Profit scope

Question 5

To create a same size analysis,calculate each line item as a percentage of ________.

Accepted Answer

A)  Sales
B)  Income
C)  Costs
D)  Units
E)  None of the above

Question 6

A fiscal year may differ from the calendar year.

Accepted Answer

A) True 
 B)False

Question 7

Examining ________ monthly can help determine what is doing well,or poorly,in a business.

Accepted Answer

A)  Operating ratios
B)  Income statement ratios
C)  Financial ratios
D)  All of the above
E)  None of the above

Question 8

What is the purpose of financial ratio analysis?

Accepted Answer

Financial ratios examine relationships a...

Question 9

ROI is always calculated for ________.

Accepted Answer

A)  A specific time period,such as a month or a year
B)  The length of a business's fiscal year
C)  A month
D)  Ever
E)  None of the above

Question 10

Cash itself or items that could quickly be turned into cash or will be used within 1 year are called ________.

Accepted Answer

A)  Current assets
B)  Long-term assets
C)  Liquid assets
D)  Current liabilities
E)  Stuff

Question 11

EBIT is an acronym for ________.

Accepted Answer

A)  Earnings before interest and taxes
B)  Earnings before income taxes
C)  Earnings before information technology costs
D)  All of the above
E)  None of the above

Question 12

If you invest $1,525,000 in a business and earn a return of $775,000,what is your ROI?

Accepted Answer

A)  51%
B)  42%
C)  45%
D)  37%
E)  57%

Question 13

What must balance with assets on the balance sheet?

Accepted Answer

A)  Liabilities and owner's equity
B)  Net worth and owner's equity
C)  Capital and owner's equity
D)  Net profit
E)  Available cash

Question 14

In a business formula such as Return on Investment,"on" means ________.

Accepted Answer

A)  "Divided by"
B)  "Deducted from"
C)  "On top of"
D)  "Instead of"
E)  None of the above

Question 15

Current assets are cash itself or items that could quickly be turned into cash (liquidated),or will be used by the business within one year.

Accepted Answer

A) True 
 B)False

Question 16

Long-term liabilities are debts that are scheduled for payment within one year.These include the portion of long-term debt due within the year.

Accepted Answer

A) True 
 B)False

Question 17

The expression,"What you made over what you paid,times one hundred," is a device to remember how to compute ________.

Accepted Answer

A)  ROI
B)  ROA
C)  ROS
D)  All of the above
E)  None of the above

Question 18

Investment is something you put time,energy,or money into because you expect to gain profit or satisfaction in return.

Accepted Answer

A) True 
 B)False

Question 19

Depreciation reflects the wear and tear on an asset over time or other loss of value through obsolescence.

Accepted Answer

A) True 
 B)False

Question 20

Define debt and equity and explain the difference between them.Where does each appear on financial statements?

Accepted Answer

Equity is the amount of capital invested...

Exam 13: Using Financial Statements to Guide a Business

The expression,"What you made over what you paid,times one hundred," is a device to remember how to compute ________.

Correct AnswerverifiedShow Answer

Current assets are cash itself or items that could quickly be turned into cash (liquidated),or will be used by the business within one year.

Correct AnswerverifiedShow Answer

EBIT is an acronym for ________.

Correct AnswerverifiedShow Answer

Depreciation reflects the wear and tear on an asset over time or other loss of value through obsolescence.

Correct AnswerverifiedShow Answer

Long-term liabilities are debts that are scheduled for payment within one year.These include the portion of long-term debt due within the year.

Correct AnswerverifiedShow Answer

If cash has decreased from $10,000 to $8000 on the balance sheet,it means the company is doing poorly.

Correct AnswerverifiedShow Answer

Examining ________ monthly can help determine what is doing well,or poorly,in a business.

Correct AnswerverifiedShow Answer

ROI is always calculated for ________.

Correct AnswerverifiedShow Answer

In a business formula such as Return on Investment,"on" means ________.

Correct AnswerverifiedShow Answer

A fiscal year may differ from the calendar year.

Correct AnswerverifiedShow Answer

If you invest $1,525,000 in a business and earn a return of $775,000,what is your ROI?

Correct AnswerverifiedShow Answer

Investment is something you put time,energy,or money into because you expect to gain profit or satisfaction in return.

Correct AnswerverifiedShow Answer

Return on Sales (ROS) is also called a(n) ________.

Correct AnswerverifiedShow Answer

Return on sales is the percentage created when sales are divided into gross margin.

Correct AnswerverifiedShow Answer

Define debt and equity and explain the difference between them.Where does each appear on financial statements?

Correct AnswerverifiedEquity is the amount of capital invested...View AnswerShow Answer

Cash itself or items that could quickly be turned into cash or will be used within 1 year are called ________.

Correct AnswerverifiedShow Answer

To create a same size analysis,calculate each line item as a percentage of ________.

Correct AnswerverifiedShow Answer

A business's operating ratios are computed by ________.

Correct AnswerverifiedShow Answer

What is the purpose of financial ratio analysis?

Correct AnswerverifiedFinancial ratios examine relationships a...View AnswerShow Answer

What must balance with assets on the balance sheet?

Correct AnswerverifiedShow Answer

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Equity is the amount of capital invested...
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Financial ratios examine relationships a...
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Correct Answer
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