ANALYSIS FOR FINANCIAL MANAGEMENT
13TH EDITION BY HIGGINS (CHAPTER 1-9)
TEST BANK
,Table of Content s
PART ONE
Assessing the Financial Health of the Firm
1 Interpreting Financial Statements
2 Evaluating Financial Performance
PART TWO
Planning Future Financial Performance
3 Financial Forecasting
4 Managing Growth
PART THREE
Financing Operations
5 Financial Instruments and Markets
6 The Financing Decision
PART FOUR
Evaluating Investment Opportunities
7 Discounted Cash Flow Techniques
8 Risk Analysis in Investment Decisions
9 Business Valuation and Corporate Restructuring
,An sw er s at the end of each chapter
Student name:
TRUE/FALSE - W r ite 'T' if the statement is tr ue and 'F' if the statement is false.
1) Current liabilities are defined as liabilities with a maturity of less than one year.
⊚ true
⊚ false
2) A decline in the Net Property, Plant, and Equipment account between year-end 2020 and year-end 2021 is
a clear indication that fixed assets were sold during 2021.
⊚ true
⊚ false
3) When reporting financial performance for tax purposes, U.S. companies prefer to use accelerated
depreciation methods over the straight-line method.
⊚ true
⊚ false
4) Accounting rules require U.S. companies to depreciate research and development (R&D) expenditures using
the straight-line method.
⊚ true
⊚ false
5) You can construct a sources and uses statement for 2021 if you have a company’s year- end balance sheets
for 2021 and 2022.
⊚ true
⊚ false
6) A reduction in long-term debt is a use of cash.
⊚ true
⊚ false
, 7) The accrual principle requires that revenue not be recognized until payment from a sale is received.
⊚ true
⊚ false
8) An increase in cash and cash equivalents should appear as a use of cash on the sources and uses
statement.
⊚ true
⊚ false
9) A cash flow statement places each source or use of cash into one of three broad categories:
operating activities, investing activities, or financing activities.
⊚ true
⊚ false
10) The cost of equity is usually reported on the income statement right below interest expense.
⊚ true
⊚ false
11) The United States was one of the first countries to adopt International Financial Reporting
Standards.
⊚ true
⊚ false
MULTIPLE CHOICE - Choo se the one alter native that best completes the statement or an sw er s the
question.
12) Which of the following statements concerning a firm’s cash flows and profits is false?
13TH EDITION BY HIGGINS (CHAPTER 1-9)
TEST BANK
,Table of Content s
PART ONE
Assessing the Financial Health of the Firm
1 Interpreting Financial Statements
2 Evaluating Financial Performance
PART TWO
Planning Future Financial Performance
3 Financial Forecasting
4 Managing Growth
PART THREE
Financing Operations
5 Financial Instruments and Markets
6 The Financing Decision
PART FOUR
Evaluating Investment Opportunities
7 Discounted Cash Flow Techniques
8 Risk Analysis in Investment Decisions
9 Business Valuation and Corporate Restructuring
,An sw er s at the end of each chapter
Student name:
TRUE/FALSE - W r ite 'T' if the statement is tr ue and 'F' if the statement is false.
1) Current liabilities are defined as liabilities with a maturity of less than one year.
⊚ true
⊚ false
2) A decline in the Net Property, Plant, and Equipment account between year-end 2020 and year-end 2021 is
a clear indication that fixed assets were sold during 2021.
⊚ true
⊚ false
3) When reporting financial performance for tax purposes, U.S. companies prefer to use accelerated
depreciation methods over the straight-line method.
⊚ true
⊚ false
4) Accounting rules require U.S. companies to depreciate research and development (R&D) expenditures using
the straight-line method.
⊚ true
⊚ false
5) You can construct a sources and uses statement for 2021 if you have a company’s year- end balance sheets
for 2021 and 2022.
⊚ true
⊚ false
6) A reduction in long-term debt is a use of cash.
⊚ true
⊚ false
, 7) The accrual principle requires that revenue not be recognized until payment from a sale is received.
⊚ true
⊚ false
8) An increase in cash and cash equivalents should appear as a use of cash on the sources and uses
statement.
⊚ true
⊚ false
9) A cash flow statement places each source or use of cash into one of three broad categories:
operating activities, investing activities, or financing activities.
⊚ true
⊚ false
10) The cost of equity is usually reported on the income statement right below interest expense.
⊚ true
⊚ false
11) The United States was one of the first countries to adopt International Financial Reporting
Standards.
⊚ true
⊚ false
MULTIPLE CHOICE - Choo se the one alter native that best completes the statement or an sw er s the
question.
12) Which of the following statements concerning a firm’s cash flows and profits is false?
