BUSI 690 HISTORICAL FINANCIAL
ANALYSIS COMPREHENSIVE STUDY GUIDE
2026 FULL QUESTIONS AND SOLUTIONS
GRADED A+
◍ purchase price.
Answer: determines difference between standard costs and actual cost
◍ Two popular techniques of comparative analysis are year-to-year change
analysis and index-number trend analysis..
Answer: TRUE
◍ chartered financial analyst.
Answer: provide advice about financial and investment choices
◍ Which of the following ratios is not generally considered to be helpful in
assessing short-term liquidity?A. Acid-test ratioB. Current ratioC. Days' to
collect receivablesD. Total asset turnover.
Answer: D
◍ You have prepared a trend series for Company XYZ for three years,
2004-2006 inclusive, using 2004 as the base year. Below are selected data.
2004 2005 2006S 100 120 135NI 99 118 128TA 100 119 130Which of the
following statements is incorrect?A. Net income in 2006 increased by
29.29% compared to 2004.B. XYZ's net income to sales (return on sales) is
higher in 2006 as compared to 2004.C. XYZ's net income to sales (return on
sales) is lower in 2005 as compared to 2004.D. Assets have increased over
time..
Answer: B
◍ Theoretically, the value of a stock should equal the sum of the present value
, of future expected dividends, discounted at the cost of equity..
Answer: TRUE
◍ Fundamental Analysis.
Answer: analyze key factors (w/o market value reference = intrinsic value)
Buy when intrinsic > market
◍ Solvancy.
Answer: long run viability and ability to pay long term obligations
◍ Which of the following statements concerning financial ratios is
incorrect?A. Accounting principles and methods used by a company will not
affect financial ratios.B. The informational value of a ratio in isolation is
limited.C. A ratio is one number expressed as a percentage or fraction of
another number.D. Calculation of financial ratios is not sufficient for a
complete financial analysis of a company..
Answer: A
◍ When comparing two companies, the company with the highest net income
should normally have the highest stock price..
Answer: FALSE
◍ Which of the following statements regarding the intrinsic value of a
company is correct?A. It can be calculated as book value plus the present
value of future expected dividends, discounted at the cost of equity capital.B
It can be calculated as present value of future expected dividends,
discounted at the cost of debt.C. It can be calculated as present value of
future expected residual income, discounted at the cost of equity capital.D.
It can be calculated as book value plus the present value of future expected
residual income, discounted at the cost of equity capital.
Answer: D
◍ cost accounting budge.
Answer: designed to control finances
◍ Weak Efficiency.
Answer: Price reflects full historical
ANALYSIS COMPREHENSIVE STUDY GUIDE
2026 FULL QUESTIONS AND SOLUTIONS
GRADED A+
◍ purchase price.
Answer: determines difference between standard costs and actual cost
◍ Two popular techniques of comparative analysis are year-to-year change
analysis and index-number trend analysis..
Answer: TRUE
◍ chartered financial analyst.
Answer: provide advice about financial and investment choices
◍ Which of the following ratios is not generally considered to be helpful in
assessing short-term liquidity?A. Acid-test ratioB. Current ratioC. Days' to
collect receivablesD. Total asset turnover.
Answer: D
◍ You have prepared a trend series for Company XYZ for three years,
2004-2006 inclusive, using 2004 as the base year. Below are selected data.
2004 2005 2006S 100 120 135NI 99 118 128TA 100 119 130Which of the
following statements is incorrect?A. Net income in 2006 increased by
29.29% compared to 2004.B. XYZ's net income to sales (return on sales) is
higher in 2006 as compared to 2004.C. XYZ's net income to sales (return on
sales) is lower in 2005 as compared to 2004.D. Assets have increased over
time..
Answer: B
◍ Theoretically, the value of a stock should equal the sum of the present value
, of future expected dividends, discounted at the cost of equity..
Answer: TRUE
◍ Fundamental Analysis.
Answer: analyze key factors (w/o market value reference = intrinsic value)
Buy when intrinsic > market
◍ Solvancy.
Answer: long run viability and ability to pay long term obligations
◍ Which of the following statements concerning financial ratios is
incorrect?A. Accounting principles and methods used by a company will not
affect financial ratios.B. The informational value of a ratio in isolation is
limited.C. A ratio is one number expressed as a percentage or fraction of
another number.D. Calculation of financial ratios is not sufficient for a
complete financial analysis of a company..
Answer: A
◍ When comparing two companies, the company with the highest net income
should normally have the highest stock price..
Answer: FALSE
◍ Which of the following statements regarding the intrinsic value of a
company is correct?A. It can be calculated as book value plus the present
value of future expected dividends, discounted at the cost of equity capital.B
It can be calculated as present value of future expected dividends,
discounted at the cost of debt.C. It can be calculated as present value of
future expected residual income, discounted at the cost of equity capital.D.
It can be calculated as book value plus the present value of future expected
residual income, discounted at the cost of equity capital.
Answer: D
◍ cost accounting budge.
Answer: designed to control finances
◍ Weak Efficiency.
Answer: Price reflects full historical
