Financial Statement Analysis D366 – PA
Question and answers 100% correct
2025/2026
A financial analyst is required to analyze the The financial analyst
financial statements of Alliah Company. cal-culated various
While analyzing, the analyst discovered short-term liquidity
that the company does not have adequate ratios.
current assets to meet its total current lia-
bilities. Thus, the company might face
difficulties in meeting its upcoming
payments toward its current liabilities.
Which method did the financial analyst use to
make this analysis?
1. A financial analyst who was analyzing Company P's fi- Percentage
change finan-
nancial statements concluded that this year, the com- cial statements
pany's revenue increased by 20%, gross
income by 16%, and net income by 10%. Last
year, the same items increased by 12%, 6%,
and 4%, respectively. Which financial
statement analysis tool did the financial an-
alyst use to conclude?
2. A company evaluates the industry's percentag
economic con-ditions using Porter's five es:
forces model. Using the analysis, the C
company wishes to identify the vertical a
competition in the value chain and its s
impact on its performance. Which one of h
Porter's five forces should the company refer
to? a
n
3. Corollary Marketing has prepared the d
common-size balance sheet for the current
year and has deter-mined the following e
,quivalents: 15% Receivables: 20% Buyer power
Property, plant, and equipment:
12% Accumulated depreciation:
(5%)
Accounts payable: 9%
All items are a
percentage of total
assets.
, Financial Statement Analysis D366 - PA
How does Corollary Marketing calculate
these per-centages?
4. Orange Zest Company specializes in household goods Low-cost
leadership strat-
and appliances. In recent years, the market has to ex-pand
be-come increasingly competitive with the the
emergence of new entrants. In light of this, business
the business decided to continue selling its by
nondifferentiated items while tak-ing a acquisition
smaller profit margin in exchange for of a
increased market share and sales volume. mature
Which strategy did the company choose to com-pany.
compete in its industry? The CEO is
particularly
5. A company's financial analyst identified that interested in
the cost of goods sold in a common-size companies
income statement was 18% in the previous that exhibit
year. However, it changed to 21% in the superior
current year. What does this analysis sales
indicate? volume
and market
6. A company's financial analyst analyzes the
share and
current year's income statement and balance
is willing to
sheet. The an-alyst has already calculated
accept low
some of the profitability and risk ratios. The
profit
company wants the analyst to determine
margins.
what a reasonable price for the company's
Which com-
common shares is. Which ratio will help the
pany
analyst in fulfilling the requirement?
meets the
7. A start-up's chief executive officer (CEO) plans CEO's
investment
, criteria based on the framework for strategic
egy
analysis?
cost of goods sold as a
percentage of sales
has increased.
Price-earnings ratio
company that sells non-
ditterentiated
products
Question and answers 100% correct
2025/2026
A financial analyst is required to analyze the The financial analyst
financial statements of Alliah Company. cal-culated various
While analyzing, the analyst discovered short-term liquidity
that the company does not have adequate ratios.
current assets to meet its total current lia-
bilities. Thus, the company might face
difficulties in meeting its upcoming
payments toward its current liabilities.
Which method did the financial analyst use to
make this analysis?
1. A financial analyst who was analyzing Company P's fi- Percentage
change finan-
nancial statements concluded that this year, the com- cial statements
pany's revenue increased by 20%, gross
income by 16%, and net income by 10%. Last
year, the same items increased by 12%, 6%,
and 4%, respectively. Which financial
statement analysis tool did the financial an-
alyst use to conclude?
2. A company evaluates the industry's percentag
economic con-ditions using Porter's five es:
forces model. Using the analysis, the C
company wishes to identify the vertical a
competition in the value chain and its s
impact on its performance. Which one of h
Porter's five forces should the company refer
to? a
n
3. Corollary Marketing has prepared the d
common-size balance sheet for the current
year and has deter-mined the following e
,quivalents: 15% Receivables: 20% Buyer power
Property, plant, and equipment:
12% Accumulated depreciation:
(5%)
Accounts payable: 9%
All items are a
percentage of total
assets.
, Financial Statement Analysis D366 - PA
How does Corollary Marketing calculate
these per-centages?
4. Orange Zest Company specializes in household goods Low-cost
leadership strat-
and appliances. In recent years, the market has to ex-pand
be-come increasingly competitive with the the
emergence of new entrants. In light of this, business
the business decided to continue selling its by
nondifferentiated items while tak-ing a acquisition
smaller profit margin in exchange for of a
increased market share and sales volume. mature
Which strategy did the company choose to com-pany.
compete in its industry? The CEO is
particularly
5. A company's financial analyst identified that interested in
the cost of goods sold in a common-size companies
income statement was 18% in the previous that exhibit
year. However, it changed to 21% in the superior
current year. What does this analysis sales
indicate? volume
and market
6. A company's financial analyst analyzes the
share and
current year's income statement and balance
is willing to
sheet. The an-alyst has already calculated
accept low
some of the profitability and risk ratios. The
profit
company wants the analyst to determine
margins.
what a reasonable price for the company's
Which com-
common shares is. Which ratio will help the
pany
analyst in fulfilling the requirement?
meets the
7. A start-up's chief executive officer (CEO) plans CEO's
investment
, criteria based on the framework for strategic
egy
analysis?
cost of goods sold as a
percentage of sales
has increased.
Price-earnings ratio
company that sells non-
ditterentiated
products
