Todays Paper Essay Example

1 . The percentage analysis of increases and decreases in individual items in comparative financial statements is called a. | vertical analysis | b. | solvency analysis | c. | profitability analysis | d. | horizontal analysis D |

2. Which of the following below generally is the most useful in analyzing companies of different sizes a. | comparative statements | b. | common-sized financial statements | c. | price-level accounting | d. | audit report |

B

3. The percent of fixed assets to total assets is an example of a. | vertical analysis | b. | solvency analysis | c. | profitability analysis | d. | horizontal analysis | A

4. What type of analysis is indicated by the following?

| | | Increase (Decrease*) | | 2011 | 2010 | Amount | Percent | Current assets | $ 380,000 | $ 500,000 | $120,000* | 24%* | Fixed assets | 1,680,000 | 1,500,000 | 180,000 | 12% |

a. | vertical analysis | b. | horizontal analysis | c. | liquidity analysis | d. | common-size analysis |

B

5. An analysis in which all the components of an income statement are expressed as a percentage of net sales is called a. | vertical analysis | b. | horizontal analysis | c. | liquidity analysis | d. | common-size analysisA |

6. A balance sheet that displays only component percentages is called a. | trend balance sheet | b. | comparative balance sheet | c. | condensed balance sheet | d. | common-sized balance sheet |

D 7. One reason that a common-size statement is a useful tool in financial analysis is that it enables the user to a. | judge the relative potential of two companies of similar size in different industries. | b. | determine which companies in a single industry are of the same value. | c. | determine which companies in a single industry are of the same size. | d. | make a better comparison of two