Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
25 Cards in this Set
- Front
- Back
|
CH 28
In a trend analysis, an index number of 139 for 20x7 sales indicates that |
sales for 20x7 were 139 percent of the sales for the same company in the base yea
|
|
|
If Year 1 equals $1,400, Year 2 equals $1,554, and Year 3 equals $1,456, the index number to be assigned for Year 3 in trend analysis
is |
104.
|
|
|
A quick ratio that is much smaller than the current ratio indicates that
|
inventories represent a large portion of current assets.
|
|
|
A high receivable turnover indicates that
|
customers are making payments very quickly
|
|
|
The ability to pay bills when due and to meet unexpected needs for cash most closely describes
|
liquidity.
|
|
|
One reason that a common‐size statementis a usefultool in financial performance evaluation isthatit enablesthe userto
|
make better comparisons of two companies of different sizes in the same industry
|
|
|
In trend analysis, each item is expressed as a percentage of the
|
base year amount.
|
|
|
In a common‐size income statement for a retail store, the 100 percent amount is fOR
|
net revenues
|
|
|
An example of horizontal analysis is
|
trend analysis.
|
|
|
A common measure of long‐term solvency is the
|
debt to equity ratio
|
|
|
CH 14
cash inflows and outflows are typically easier to manipulate than earning. |
True
|
|
|
Declared and issued stock divined
|
does not represent a cash flow
|
|
|
sold a long term investment
|
investing activities
|
|
|
paid interest on note
|
operating activities
|
|
|
received dividend on securities held.
|
operating activities
|
|
|
issued common stock for cash
|
financing activities
|
|
|
purchased land and building with a mortage
|
schedule of non-cash investing and financing activities
|
|
|
sold building and equipment for cash
|
investing activities actions
|
|
|
depreciation on equipment
|
operating activities
|
|
|
when statement of cash flows is prepared using indirect method
|
net income is the starting point
|
|
|
the equation for finding the breakeven point may be written as
|
S - VC - FC = 0.
|
|
|
The breakeven point is
|
where total revenue equals total costs.
|
|
|
In a graph of cost‐volume‐profit analysis, the
|
slope of the total cost line is dependent on the variable cost per unit.
|
|
|
At production levels beyond the breakeven point,
|
profit is postive
|
|
|
The breakeven pointisthe point at which
|
contribution margin equals fixed costs.
|
