Accounting Issues: Chapter 8 -
Financial Statement Analytics Exam
Questions & Answers (Grade A+)
Financial Statement Analytics -
correct answer ✅Used by investors, analysts, auditors, and other
interested stakeholders to review and evaluate a company's
financial statements and financial performance.
Ratio Analysis -
correct answer ✅A tool that attempts to evaluate relationships
among different financial statement items to help understand a
company's financial and operating performance.
What is the formula for gross profit ratio? -
correct answer ✅Gross profit / Revenue
Vertical Analysis -
correct answer ✅An analysis that shows the proportional value of
accounts to a primary account, such as Revenue
Liquidity -
correct answer ✅The ability to satisfy the company's short-term
obligations using assets that can be most readably converted into
cash
,Accounting Issues: Chapter 8 -
Financial Statement Analytics Exam
Questions & Answers (Grade A+)
What is the current ration formula? -
correct answer ✅Current Assets / Current Liabilities
What is the Quick (acid test) ratio formula? -
correct answer ✅(Current assets - Inventory) / Current Liabilities
What is the working capital formula? -
correct answer ✅Current assets - Current liabilities
What is the Asset turnover ratio formula? -
correct answer ✅Net Sales / Average total assets
What is the Receivable turnover ratio formula? -
correct answer ✅Net Sales / Average net accounts receivable
What is the Average collection period ratio formula? -
correct answer ✅365 / Receivables turnover
, Accounting Issues: Chapter 8 -
Financial Statement Analytics Exam
Questions & Answers (Grade A+)
What is the Inventory turnover ratio formula? -
correct answer ✅Cost of goods sold / Average Inventory
What is the Average days in inventory ratio formula? -
correct answer ✅365 / Inventory Turnover
What is the Debt-to-equity ratio formula? -
correct answer ✅total liabilities / stockholders equity
What is the times interest earned ratio formula? -
correct answer ✅Income before interest and taxes / Interest
Expense
What is the Profit margin on sales ratio formula? -
correct answer ✅Net income / Net Sales
What is the Return on assets ratio formula? -
correct answer ✅Net income / Average total assets
Financial Statement Analytics Exam
Questions & Answers (Grade A+)
Financial Statement Analytics -
correct answer ✅Used by investors, analysts, auditors, and other
interested stakeholders to review and evaluate a company's
financial statements and financial performance.
Ratio Analysis -
correct answer ✅A tool that attempts to evaluate relationships
among different financial statement items to help understand a
company's financial and operating performance.
What is the formula for gross profit ratio? -
correct answer ✅Gross profit / Revenue
Vertical Analysis -
correct answer ✅An analysis that shows the proportional value of
accounts to a primary account, such as Revenue
Liquidity -
correct answer ✅The ability to satisfy the company's short-term
obligations using assets that can be most readably converted into
cash
,Accounting Issues: Chapter 8 -
Financial Statement Analytics Exam
Questions & Answers (Grade A+)
What is the current ration formula? -
correct answer ✅Current Assets / Current Liabilities
What is the Quick (acid test) ratio formula? -
correct answer ✅(Current assets - Inventory) / Current Liabilities
What is the working capital formula? -
correct answer ✅Current assets - Current liabilities
What is the Asset turnover ratio formula? -
correct answer ✅Net Sales / Average total assets
What is the Receivable turnover ratio formula? -
correct answer ✅Net Sales / Average net accounts receivable
What is the Average collection period ratio formula? -
correct answer ✅365 / Receivables turnover
, Accounting Issues: Chapter 8 -
Financial Statement Analytics Exam
Questions & Answers (Grade A+)
What is the Inventory turnover ratio formula? -
correct answer ✅Cost of goods sold / Average Inventory
What is the Average days in inventory ratio formula? -
correct answer ✅365 / Inventory Turnover
What is the Debt-to-equity ratio formula? -
correct answer ✅total liabilities / stockholders equity
What is the times interest earned ratio formula? -
correct answer ✅Income before interest and taxes / Interest
Expense
What is the Profit margin on sales ratio formula? -
correct answer ✅Net income / Net Sales
What is the Return on assets ratio formula? -
correct answer ✅Net income / Average total assets
