CHAPTER_7_ANALYSIS_OF_FINANCIAL_STATEMENTS

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1、CHAPTER7—ANALYSISOFFINANCIALSTATEMENTS1. Ratioanalysisinvolvesanalyzingfinancialstatementsinordertoappraiseafirm'sfinancialpositionandstrength. a. True b. FalseANSWER:  TruePOINTS:  1DIFFICULTY:  Difficulty:EasyLEARNING OBJECTIVES:  INTE.GENE.16.45-LO:7-1NATIONAL STANDARDS:  UnitedSt

2、ates-BUSPROG:ReflectiveThinkingSTATE STANDARDS:  UnitedStates-AK-DISC:Financialstatements,anal-DISC:Financialstatements,analysis,forecasting,andcashflowsLOCAL STANDARDS:  UnitedStates-OH-DefaultCity-TBATOPICS:  RatioanalysisKEYWORDS:  Bloom’s:Knowledge2. Thecurrentratioandinventorytu

3、rnoverratiosbothhelpusmeasurethefirm'sliquidity.Thecurrentratiomeasurestherelationshipofafirm'scurrentassetstoitscurrentliabilities,whiletheinventoryturnoverratiogivesusanindicationofhowlongittakesthefirmtoconvertitsinventoryintocash. a. True b. FalseANSWER:  TruePOINTS:  1DIFFICULTY

4、:  Difficulty:EasyLEARNING OBJECTIVES:  INTE.GENE.16.46-LO:7-2NATIONAL STANDARDS:  UnitedStates-BUSPROG:ReflectiveThinkingSTATE STANDARDS:  UnitedStates-AK-DISC:Financialstatements,anal-DISC:Financialstatements,analysis,forecasting,andcashflowsLOCAL STANDARDS:  UnitedStates-OH-Defaul

5、tCity-TBATOPICS:  LiquidityratiosKEYWORDS:  Bloom’s:Knowledge3. Althoughafullliquidityanalysisrequirestheuseofacashbudget,thecurrentandquickratiosprovidefastandeasy-to-usemeasuresofafirm'sliquidityposition. a. True b. FalseANSWER:  TruePOINTS:  1DIFFICULTY:  Difficulty:EasyLEARNING O

6、BJECTIVES:  INTE.GENE.16.46-LO:7-2NATIONAL STANDARDS:  UnitedStates-BUSPROG:ReflectiveThinkingSTATE STANDARDS:  UnitedStates-AK-DISC:Financialstatements,anal-DISC:Financialstatements,analysis,forecasting,andcashflowsLOCAL STANDARDS:  UnitedStates-OH-DefaultCity-TBATOPICS:  Liquidityr

7、atiosKEYWORDS:  Bloom’s:KnowledgeCengageLearningTesting,PoweredbyCogneroPage 54CHAPTER7—ANALYSISOFFINANCIALSTATEMENTS4. Highcurrentandquickratiosalwaysindicatethatafirmismanagingitsliquiditypositionwell. a. True b. FalseANSWER:  FalsePOINTS:  1DIFFICULTY:  Difficulty:EasyLEARNING OBJ

8、ECTIVES:  IN