墨尔本大学期中考试试卷

墨尔本⼤学期中考试试卷
ACCT90002: Financial Statement Analysis
SAMPLE EXAM for Mid-Semester Exam
1.One important difference between return on assets (ROA) and return on shareholder’s equity
(ROE) is
a. ROA does not differentiate based on how a company finances its assets, ROE does.
b. ROA does not distinguish between the different types of income items, such as income
from continuing operations, discontinued operations, extraordinary items and changes
in accounting principles, ROE does.
c. ROE does not distinguish between the different types of income items, such as income
from continuing operations, discontinued operations, extraordinary items and changes
in accounting principles, ROA does.
d. ROE does not differentiate based on how a company finances its assets, ROA does.
2.Asset turnover represents
a. The ability of the firm to generate income from operations for a particular level of
sales.
b. The ability to generate sales from a particular investment in assets.
c. The ability to manage the level of investment in assets for a particular level of assets.
d. The number of days, on average, it takes management to turnover assets.
3.Molitor Company currently has a current ratio of 1.1. The company decides to borrow
$1,000,000 from City National Bank for a period of six months. After the borrowing
Molitor's current ratio will be
a. greater than 1.1
b. 1.1
c. Less than 1.1
d. unable to determine with out more information
4. One common problem with the current ratio is that it is susceptible to "window dressing". If
prior to the end of the accounting period Streetwise Company has a current ratio of 1.5 and management wishes to boost its current ratio it may decide to
a. Pay off accounts payable prior to year end.
b. purchase more inventory on account.
c. purchase short-term investments with cash.
d. purchase more inventory with cash.
The following information relates to questions 5, 6, and 7
HighTech Company manufactures computer technology devices. Selected financial data for HighTech is presented below,
use the information to answer the following questions:
Current Assets As of Dec. 31, 2009 Dec. 31, 2008 Cash and short-term investments $1,267,038 $ 616,604 Accounts Receivable (net) 490,816 665,828 Inventories 338,599 487,505 Prepaid Expenses and other current assets 292,511 291,915 Total Current Assets $2,388,964 $2,061,852 Current Liabilities
Short-term borrowings $ 25,190 $ 38,108 Current portion of long-term debt 182,295 210,090 Accounts payable 296,307 334,247 Accrued liabilities 941,912 743,999 Income taxes payable 203,049 239,793 Total Current Liabilities 1,648,753
1,566,237 Selected Income Statement Data - for the year ending December 31, 2009:
Net Sales $4,885,340 Cost of Goods Sold 2,542,353 Operating Income 733,541 Net Income 230,101 Selected Statement of Cash Flow Data - for the year ending December 31, 2009:
Cash Flows from Operations $1,156,084
5. HighTech's current ratio in 2009 was
a. 1.07
b. 1.45
c. 1
d. 0.69
6. HighTech's quick ratio improved by what percentage from 2008 to 2009?
a. 30%
b. 107%
c. 25%
d. 82%
7. HighTech's Operating Cash Flow to Current Liabilities ratio in 2009 was
a. 0.70
b. 1.39
c. 1.00
d. 0.72
8. Which of the following would affect the comparison of financial statements across two different firms?
I. Different accounting principles
II. Different sizes of the companies
III. Different reporting periods
IV. Different industries
A. I, III and IV
B. I and IV
C. I and II
D. I, II, III and IV
9. Gains and losses that appear in Other Comprehensive Income are the result of value changes
a. only in non-current assets and liabilities.
b. in stockholders' equity.
c. driven by difficult measurement issues.
d. that have not been realized in a market transaction.
Below is selected information taken from the balance sheet of Huy Corporation as of
12/31/06.
10. The average depreciable life of Huy's depreciable assets as of 2006 is:
A. 2 years
B. 7 years
C. 14 years
D. 34 years
11. The average age of Huy's depreciable assets as of 2006 is:
A. 2 years
B. 7 years
C. 14 years
D. 34 years
12. Which of the following statements concerning financial ratios is incorrect?
a. Accounting principles and methods used by a company will not affect financial ratios.
b. The informational value of a ratio in isolation is limited.
c. A ratio is one number expressed as a percentage or fraction of another number.
d. Calculation of financial ratios is not sufficient for a complete financial analysis of a
company.
13. If a company engages in off-balance sheet financing, generally the effect is:
I. to cause assets to be understated.
II. to increase leverage ratios.
III. to increase cash flows.
IV. to cause liabilities to be understated.
a. I, II, III and IV
b. I, III and IV
c. I and IV
d. IV only
14. New Age Systems (NAS) sells a large quantity of computer equipment to the ABC
Insurance Company for an agreed price of $5 million. At the time the market price for the equipment was $5.5 million. ABC agrees to pay $1 million at the end of each of the next five years at an interest rate of 5% per annum. NAS will record the transaction in its Balance Sheet as:
a. an Account Receivable at $5 million
b. a Note Receivable at the present value of $1 million at 5% pa for five years
c. a Note Receivable at the market value of $5.5 million
d. a Fixed Asset at the present value of $1 million for five years but adjusted for the interest rate that applies in each of the years.
15. A write-down in asset value is:
a. a very rare occurrence.
b. not allowed under Generally Accepted Accounting Principles.
c. results in a direct debit to stockholders' equity.
d. required if an asset is deemed to have permanent impairment of valu
e.
16. Beginning accounts receivable are $76,000. Sales for the period total $384,000, of which $40,000 was directly for cash. $418,000 was collected from making sales and collecting accounts receivable. What is the ending balance for accounts receivable?
a. $42,000
b. $2,000
c. $82,000
d. $68,000
17. On a statement of cash flows that uses the indirect approach, calculation of cash flow from operations treats depreciation as an adjustment to reported net income because:
a. depreciation is a direct source of cash
b. depreciation is an outflow of cash to a reserve account for the replacement of assets
c. depreciation reduces net income and involves an outflow of cash
d. depreciation reduces net income but does not involve an outflow of cash
18. Compared with companies that expense costs, firms that capitalize costs can be expected to report:
a.higher asset levels and lower equity levels.
b. higher asset levels and higher equity levels.
c. lower asset levels and higher equity levels.
d. lower asset levels and lower equity levels.
19. Which of the following would rarely be classified as a current asset?
A. Prepaid insurance
B. Goodwill
C. Marketable Securities
D. Work-in-progress
20. A firm’s balance sheet shows the following:
Assets $500,000; Liabilities $600,000; Shareholder’s Capital $50,000; Owner’s Equity ($100,000).
The Retained Profit/Loss for the firm is:
a.($50,000)
b.$100,000
21. Which of the following is not an effect of capitalization?
A. Capitalization usually reduces net income.
B. Capitalization usually yields a smoother net income.
C. Capitalization usually decreases the volatility of the return on investment.
D. Capitalization usually increases net income.
22. An analyst should treat preferred stock on a firm's balance sheet as debt when calculating leverage ratios if the preferred stock is:
a. redeemable by shareholders
b. convertible into common stock
c. issued at a variable dividend rate
d. callable by the issuer
23. Target Inc. has 30M shares outstanding and trades at $50 per share. Target has net identifiable assets with a book value of $1,000M and a fair value of $1,200M. Acquirer Corporation purchases all of Target Inc. stock for $60 per share. How much will Acquirer record as goodwill upon acquiring Target?
A. 300M
B. 500M
C. 600M
D. 800M
Below is information for year ended 31/12/09 for Company A and Company B and relates to questions 24 to 27. Company A $ Company B $
Interest expense 400 0
Tax expense (40%) 400 400
Net Income 600 600
Total Assets 31/12/2009 10,000 10,000
Total Debt 5,000 0
Equity 5,000 10,000
24. Return on assets (using EBIT) for Company A and B for 2009 are:
a. Option A
b. Option B
c. Option C
d. Option D
25. Financial leverage ratio for Company A and B for 2009 are:
a. Option A
d. Option D
26. It was subsequently discovered that Company A had capitalized $100 in interest costs during the year. The Interest Coverage ratio, after such adjustment, for Company A
is:
a. 3.5
b. 2.8
c. 3.0
d. 1.2
27. Which of the following statements is correct?
a. Company A has the same ROA as company B
b. Company A has a lower ROE than company B
c. Company A has same ROE as company B
d. Company A has used financial leverage to increase its return to its shareholders The following information is derived from the Statement of Cash flows.
28. What is net cash flow from operations?
A. $58,000
B. $55,000
C. $54,000
D. $48,000
29. What is net cash flow from investing?
A. $10,000
B. $5,000
C. ($5,000)
D. ($15,000)
30. What is net cash flow from financing?
A. $6,000
B. $3,000
C. ($14,000)
D. ($17,000)
31. What is change in cash?
A. $49,000
B. $46,000
C. $45,000
32. If a company changes the useful life of its assets from 10 years to 12 years, this will be recorded as:
A. a non-recurring gain.
B. an extraordinary item.
C. a change in accounting principle.
D. None of the above
The following ten questions relate to the attached three pages of financial reports of an Australian publicly listed company. (Note the amounts are expressed in thousands of dollars)
Question 33
The net change in cash for the year ended 30 June 2009 is:
A $17,083
B ($2,147)
C ($12,522)
D $4,561
Question 34
The amount of loans repaid to lenders of funds to the firm in the year ended 30 June 2009 is:
A $679
B $242
C $1,905
D $20,000
Question 35
For the year ended 30 June 2009 what is the approximate rate of interest the firm paid to lenders of funds?
A 24.32%
B 10.53%
C 7.33%
D 2.27%
Question 36
Using EBIT, what is the firm’s ROA for the year ended 30 June 2009?
A (3.33%)
B (3.78%)
C (4.78%)
D (5.15%)
Question 37
The firm’s ROE for the year ended 30 June 2009 is:
A (16.35%)
C (12.93%)
D (11.99%)
Question 38
Using EBIT, the firm’s profit margin for the year ended 30 June 2009 is:
A (1.6%)
B (2.3%)
C (6.6%)
D (9.4%)
Question 39
The firm’s asset turnover for the year ended 30 June 2009 is:
A 2.26
B 2.09
C 0.76
D 0.51
Question 40
What is the capital structure leverage for the firm for the year ended 30 June 2009? (rounded to 2 decimal places)
A 4.03
B 3.42
C 3.18
D 3.15
Question 41
Which of the following ratios would be the most appropriate to determine a specific aspect of the manager in charge of sales’performance for the year ended 30 June 2009?
A Debt to Equity
B Return on Equity
C Current ratio
D Inventory Turnover
Question 42
For the year ended 30 June 2009, the most logical explanation why Plant and Equipment is less in 2009 compared to 2008 is:
A Misappropriation of inventory
B An expense allocation of the original cost
C Sale of Plant and Equipment no longer required by the firm
D A spreading of the loss incurred by the firm over its assets
FORMULA SHEET
Profit Margin for ROA = EBIT/Sales Inventory Turnover = COGS/Average
Inventory
Total Assets Turnover = Sales/Average Total Assets Accounts Receivable Turnover = Sales/Average Accounts Receivable Return on Assets = EBIT/Average Total Assets Current Ratio = Current Assets/Current Liabilities
Profit Margin for ROE = NPAT/Sales Operating Cash Flow to Current Liabilities
Ratio = Cash Flow from Operations/Average
Current Liabilities
Capital Structure Leverage ratio = Average Total Assets/Average Shareholders Equity Liabilities to Assets Ratio
= Total Liabilities/Total Assets
Return on Equity = NPAT/Average Shareholders Equity Times Interest earned Ratio = EBIT/Interest Expense
上⼀页下⼀页。