上海对外贸易学院财管中加财务报表分析期中考试(答案见其他word)

Marks:TRUE/FALSE(1 point for each question, total 20 points)(Note: Put your answer into the following table correspondingly.)( ) (1) All of the information needed by professional analysts to give a complete picture of a company is found in the published financial statements.( ) (2) Suppliers monitor the financial statements of their customers to protect collection of their accounts receivable.( ) (3) Timeliness is a qualitative characteristic of accounting information that indicates that information should be provided to users before statutory deadlines.( ) (4) Generally accepted accounting principles are set by the Securities and Exchange Commission.( ) (5) The ability to raise additional cash by selling assets, issuing stock, or borrowing more is financial flexibility.( ) (6) To measure earnings under accrual accounting, revenues are recognized when they are received.( ) (7) The matching principle requires that expenses be recognized in the same period in which the revenues are recognized that were produced by the expenses.( ) (8) Basic earnings per share is computed by dividing net income by the weighted average number of common shares of stock outstanding.( ) (9) Liquidity refers to the ability of a company to generate sufficient cash flows to maintain its productive capacity and still meet interest and principal payments on long-term debt.( ) (10) The change in cash during a period is equal to the net income for the period. ( ) (11) Depreciation is added back to net income to determine cash from operating activities under the indirect method.( ) (12) Current assets are listed on the balance sheet in descending order of liquidity. ( ) (13) The quick ratio measures the most immediate liquidity of a company.( ) (14) Activity ratios describe the profitability of a company.( ) (15) Financial leverage is beneficial when the company earns more than the incremental after-tax cost of debt.( ) (16) Managers’ ability to freely choose among several alternative reporting methods makes it more difficult for a financial analyst to evaluate the activities and condition of a company.( ) (17) Asset turnover is defined as sales divided by total assets.( ) (18) Beginning inventory plus inventory purchases equals cost of goods sold.( ) (19) Dividends paid by a corporation represent a distribution of earnings to stockholders.( ) (20) The direct approach and the indirect approach are two alternative methods of presenting cash flows from investing activities.MULTIPLE CHOICES(1.5 points for each question, total 30 points)(Note: Put your answer into the following table correspondingly.)Which of the following is included in other comprehensive income?A.Unrealized holding gains and losses on trading securities.B.Unrealized holding gains and losses that result from a debt security being transferred into theheld-to-maturity category from the available-for-sale category.C.Foreign currency translation adjustments.D.The difference between the accumulated benefit obligation and the fair value of pensionplan assets.( ) (2) A decrease in net assets arising from peripheral or incidental transactions is called a(n)A.capital expenditure.B.cost.C.loss.D.expense.( ) (3) According to generally accepted accounting principles, revenue should be recognized at the earliest time thatA.the “critical event” has taken place and the proceeds are collected.B.the “critical event” has taken place and the amount of revenue collected is reasonablyassured.C.collection is reasonably assured and the “critical event” can be mea sured.D.collection has taken place and the “critical event” can be measured.( ) (4) How are marketable securities valued on the balance sheet?A.Historical cost.B.At cost or fair value depending on how the securities are classified.C.Market value.D.At fair value with the difference between cost and fair value reported as revenue.( ) (5) Probable future economic benefits obtained or controlled by an entity as a result of past transactions or events defineA.assets.B.liabilities.C.equity.D.retained earnings.( ) (6) Which profit measure is best for assessing how well a firm operates within their industry?A.Gross profit.B.Operating profit.C.Earnings before taxes. profit.( ) (7) Operating and financial flexibility refers to a company’s ability toA.adjust to unexpected downturns in the economic environment in which it operates or totake advantage of profitable investment opportunities as they arise.B.generate sufficient cash flows to maintain its productive capacity and still meet interestand principal payments on long-term debt.C.readily convert assets to cash relative to how soon liabilities will have to paid in cash.D.finance debt in ratio to financing through equity sources.( ) (8) During 2007, Gomez Corporation disposed of Pine Division, a major component of its business. Gomez realized a gain of $1,200,000, net of taxes, on the sale of Pine's assets. Pine's operating losses, net of taxes, were $1,400,000 in 2007. How should these facts be reported in Gomez's income statement for 2007?Total Amount to be Included inIncome from Results ofContinuing Operations Discontinued OperationsA.$1,400,000 loss $1,200,000 gainB.200,000 loss 0C.0 200,000 lossD.1,200,000 gain 1,400,000 loss( ) (9) The amount of income taxes recognized on the income statement but not yetpayable to the government are found on theA.balance sheet in the account Deferred Income Taxes.B.balance sheet in the account Income Taxes Payable.C.income statement in the account Income Tax Expense Current.D.income statement in the account Income Tax Expense Deferred.( ) (10) Net income for Monique Inc. for the fiscal period ended December31, 2005 is $78,000.Its accounts receivable balance at December 31,2005 is $121,000 and it was $69,000 at December31, 2004. Its accounts payable balance at December 31, 2005 is $72,000 and it was $43,000 at December 31, 2004. Depreciation for 2005 is $12,000 and there is an unrealized gain of $15,000 included in 2005 income from the change in value of trading securities. Which of the following amounts represents Monique's cash flow from operations for 2005?A.$52,000.B.$67,000.C.$82,000.D.$98,000.( ) (11) Return on equity using the traditional DuPont formula equals :A.(net profit margin)(interest component)(solvency ratio).B.(net profit margin)(total asset turnover)(tax retention rate).C.(net profit margin)(total asset turnover)(financial leverage multiplier).D.(tax rate)(interest expense rate)(financial leverage multiplier).( ) (12) Financial statements followA.rigid guidelines that require specific adherence to regulated procedures.B.generally accepted guidelines that allow management to choose among differentprocedures.C.general guidelines with little choice among different procedures.D.legal requirements for uniform presentation and disclosure.( ) (13) Published reports of public companies include a description of the company’s business risks, results of operations, financial condition, and future plans for the company known as theA.management discussion and analysis.B.management representation letter.C.President’s message.D.Board of Directors’ analysis.( ) (14) Financial information that is verifiable, faithfully represented, and neutral isA.reliable.B.consistent.parable.D.relevant.( ) (15) Revenues are earned whenA. a contract is signed by both parties.B.the seller substantially completes performance required by an agreement.C.the buyer completes payment required under an agreement.D.the buyer accepts delivery and completes required payments.( ) (16) The bes t measure of a firm’s sustainable income isA.income from continuing operations.B.income before extraordinary items.C.income before extraordinary item and change in accounting principle. income.( ) (17) Working capital accounts includeA.all assets.B.all assets and liabilities.C.current assets and all liabilities.D.current assets and current liabilities.( ) (18) What impact does depreciation have on the cash account?A.Depreciation results in an increase to cash.B.Depreciation results in an decrease to cash.C.Depreciation has no impact on the cash account.D.Depreciation only impacts the cash account if inflation has occurred.( ) (19) The write-off of obsolete equipment would be classified as:A.operating cash flow.B.investment cash flow.C.financing cash flow.D.no cash flow impact.( ) (20) In a common-size balance sheet, each balance sheet is expressed as a percentage of totalA.liabilities.B.assets.C.shareholders’ equity.D.assets plus shareholders’ equity.COMPUTATIONAL QUESTIONS: (25 points each, total 50 points)(Note: Write your answer clearly into the space following each question.)1）Monsanto’s 1994 Annual Report stated that the Chairman and CEO, Richard J. Mahoney, would retire on March 31, 1995. Mahoney’s cash compensation for 1994 consisted of :Salary $950,000 Annual incentive award(based primarily on achieving or exceeding a net income goal) 1,680,000 Total cash compensation $2,630,000In addition, Mahoney participated in a long term compensation plan that granted annual stock option awards if the return on stockholder’s equity exceeded 20%. Monsanto’s reported ROE was Net income = $622 millionOpening stockholders’ equity = $2,855 millionClosing stockholders’ equity = $2,948 millionROE = Net income/average stockholders’ equity = $622/$2,902= 21.4%Excerpts from 1994 Annual Report (in $millions)1994 1993 1992 Net income (loss) $622 $494 ($88)ROE 21.4% 16.9% (2.6%) Note: Restructurings and Other ActionsIn December 1994, the board of directors approved a plan to eliminate redundant staff activities across the company and consolidate certain staff and administrative business functions. The plan will result in reductions in worldwide employment levels of approximately 500 people. In addition, the company will close or exit certain facilities and programs. These workforce reductions and closures will be substantially completed by the end of 1995. The pretax expense related to these actions was $89 million ($55 million after tax).In September 1994, Monsanto received $67 million from the U.S. Internal Revenue Service in settlement of certain tax matters related to the 1985 acquisition of Searle. This settlement included interest of $33 million （$21 million after tax）, recorded as a one-time gain. Most of the remainder of the proceeds reduced the balance of unamortized goodwill related to the Searle acquisition….…Restructuring expenses are recorded based on estimates prepared at the time the restructuring actions are approved by the board of directors. In the fourth quarter of 1994, the board approved the reversal of $49 million of pretax excess restructuring reserves from prior years. The excess was primarily due to higher than expected proceeds and lower exit costs from the sale and shutdown of nonstrategic businesses and facilities included in the 1993 and 1992 restructuring actions. The balance in restructuring reserves as of Dec. 31, 1994, was $254 million, and consisted primarily of workforce reduction costs under the 1994 actions and planned facility dismantling and site closure costs remaining under previous restructurings. Management believes that the balance of these reserves as of Dec. 31, 1994, is adequate for completion of those activities….Given the reported ROE of 21.4%, Mahoney was granted options for 275,000 shares at $77.75per share, the market price on the grant date. At the end of November 1995, the market price of Monsanto shares was $120 per share. In exercised and sold, the option would have gained about $11,600,000( $42.25*275,000).ing the information presented, discuss whether Mahoney’s stock option were deserved.Provide at least one argument for and one argument against the option award.b.Discuss whether the nonrecurring events disclosed should be included in managementperformance measures such as ROE.ing the information presented, discuss the expected level of Monsanto’s future incomeand ROE.2）The balance sheet and income statement for the Green Company are presented in the Exhibit 1 .a. Based on the financial statements provided, prepare a statement of cash flows for 2001 using thei) Indirect methodii) Direct methodb. Calculate the company’s free cash flow.EXHIBIT 1 THE GREEN COMPANYBalance Sheet and Income StatementBalance Sheet Income Statement for the YearAs of December 31 2001 2000 Ending December 31,2001Assets Sales $10,000 Cash $1,000 $1,100 Cost of goods sold 6,000 Accounts receivable 1,500 1,650 Depreciation 600 Inventory 2,000 2,200 SG&A 1,000 Total current assets $4,500 $4,95 Interest expense 600Fixed assets—at cost*11,000 12,150 Taxable income $1,800 Accumulated depreciation 4,500 5,100 Taxes 720 Net fixed assets 6,500 7,050 Net income $1,080 Total assets $11,000 $12,000Liabilities and EquityAccrued liabilities $ 800 $880Accounts payable 1,200 1,320Notes payable 5,500 6,050Total current liabilities 7,500 8,250Long-term debt 2,000 1,620Common stock 1,000 1,000Retained earnings 500 1,148Total liabilities and equity $11,000 $12,000* No fixed assets were sold during 1996.。