D196 Module 4/5 Questions and Answers
Questions in this set (54)
Examining both the relationships among financial statement
What is the definition of
numbers and the trends in those numbers over time
financial statement analysis?
3 multiple choice options
How is a common-size income By dividing all income statement amounts for a given year by sales for
statement created? that year
3 multiple choice options
What is the purpose of To highlight trends that may be occurring in the company over time
performing horizontal 3 multiple choice options
analysis of financial
statements?
Displaying each line item as a percentage of another for
What is the definition of
comparison to other companies in the industry
vertical analysis of financial
statements? 3 multiple choice options
How does vertical financial It tells you what questions you need to be asking about a company's
statement performance.
analysis inform your
understanding of a 3 multiple choice options
company's performance?
Which types of companies can Companies that provide the same types of goods or services 3
be compared using vertical multiple choice options
analysis?
Vertical analysis allows an Total sales 3 multiple choice
,accountant to determine how options
expenses are changing
relative to which line item on
the income statement?
An investor compares a Financial statement analysis 3 multiple choice
company's income statements options
over the last three years to
track growth, reviews the
balance sheet to check its
debt levels, and analyzes
cash flow trends to assess
liquidity. What is the investor
performing?
, To better compare two Common-size financial statement 3 multiple choice
companies of different sizes, options
an analyst converts every
item on their income
statements into percentages
of total revenue. This allows
her to see what portion of
income goes to expenses like
rent and salaries. What type
of statement is she
creating?
An accountant compares a Horizontal analysis 3 multiple choice
company's sales figures options
from 2022 to 2023 and
calculates the percentage
increase. She does the
same for expenses and net
income to see how the
business is growing over
time. What type of analysis
is she performing?
In Excel, Maria enters the Relative reference 3 multiple choice
formula =B2+C2 into cell D2. options
When she copies that
formula down to cell D3, it
automatically updates to
=B3+C3 to reflect the new row.
What kind of cell reference is
Excel using?
In Excel, Marcus creates a Absolute reference 3 multiple choice
formula that multiplies a options
sales amount in row 2 by
the tax rate in cell B1. He
writes the formula as
=A2*$B$1 and copies it down. The
sales row updates
automatically, but the tax rate
Questions in this set (54)
Examining both the relationships among financial statement
What is the definition of
numbers and the trends in those numbers over time
financial statement analysis?
3 multiple choice options
How is a common-size income By dividing all income statement amounts for a given year by sales for
statement created? that year
3 multiple choice options
What is the purpose of To highlight trends that may be occurring in the company over time
performing horizontal 3 multiple choice options
analysis of financial
statements?
Displaying each line item as a percentage of another for
What is the definition of
comparison to other companies in the industry
vertical analysis of financial
statements? 3 multiple choice options
How does vertical financial It tells you what questions you need to be asking about a company's
statement performance.
analysis inform your
understanding of a 3 multiple choice options
company's performance?
Which types of companies can Companies that provide the same types of goods or services 3
be compared using vertical multiple choice options
analysis?
Vertical analysis allows an Total sales 3 multiple choice
,accountant to determine how options
expenses are changing
relative to which line item on
the income statement?
An investor compares a Financial statement analysis 3 multiple choice
company's income statements options
over the last three years to
track growth, reviews the
balance sheet to check its
debt levels, and analyzes
cash flow trends to assess
liquidity. What is the investor
performing?
, To better compare two Common-size financial statement 3 multiple choice
companies of different sizes, options
an analyst converts every
item on their income
statements into percentages
of total revenue. This allows
her to see what portion of
income goes to expenses like
rent and salaries. What type
of statement is she
creating?
An accountant compares a Horizontal analysis 3 multiple choice
company's sales figures options
from 2022 to 2023 and
calculates the percentage
increase. She does the
same for expenses and net
income to see how the
business is growing over
time. What type of analysis
is she performing?
In Excel, Maria enters the Relative reference 3 multiple choice
formula =B2+C2 into cell D2. options
When she copies that
formula down to cell D3, it
automatically updates to
=B3+C3 to reflect the new row.
What kind of cell reference is
Excel using?
In Excel, Marcus creates a Absolute reference 3 multiple choice
formula that multiplies a options
sales amount in row 2 by
the tax rate in cell B1. He
writes the formula as
=A2*$B$1 and copies it down. The
sales row updates
automatically, but the tax rate
