Financial Analysis Techniques

In a vertical common-size income statement, each item is expressed as a percentage of which line item?

Which ratio measures the average number of days it takes for a company to collect cash from its customers?

A company has a Cost of Goods Sold (COGS) of 500,000 and an Average Inventory of 100,000. What is the Inventory Turnover Ratio?

Which of the following items is excluded from the numerator when calculating the Quick Ratio (Acid-test ratio)?

How is the Cash Conversion Cycle calculated?

Which solvency ratio is calculated as Average Assets divided by Average Equity?

If a company has an EBIT of 100,000 and Interest Expense of 20,000, what is its Interest Coverage Ratio?

The Gross Profit Margin is calculated as:

In the 3-step DuPont Analysis, Return on Equity (ROE) is decomposed into which three components?

In the 5-step DuPont decomposition, the Tax Burden ratio is defined as:

A business segment must be reported separately if it accounts for more than what percentage of the company's revenues or assets?

Which forecasting method involves examining the variability of financial outcomes based on 'what if' questions?

Horizontal common-size analysis is best described as:

Calculate the Operating Profit Margin given: Sales = 1000, COGS = 400, SG&A = 200, Interest = 50.

What does a high Receivables Turnover Ratio typically indicate?

Return on Assets (ROA) calculated as Net Income divided by Average Assets may be adjusted by adding back which item to the numerator?

If Net Profit Margin is 10 percent, Asset Turnover is 1.5, and Financial Leverage is 2.0, what is the ROE?

Which ratio assesses a firm's ability to pay off its short-term liabilities with its most liquid assets, excluding inventory?

The Interest Burden ratio is calculated as:

Which of the following is considered a 'defensive interval' component in the Defensive Interval Ratio?

Calculate the Debt-to-Capital Ratio if Total Debt is 400 and Total Equity is 600.

Which technique allows for checking financial ratio consistency by comparing a company to its industry peers?

If a company has a Financial Leverage ratio of 1.0, what does this imply?

Which ratio uses 'Average Daily Expenses' in its denominator?

Coefficient of Variation (CV) of sales is a measure of:

Working Capital Turnover Ratio is calculated as:

Which margin is calculated as Net Income divided by Sales?

If a company has a higher Asset Turnover ratio than its competitor, it suggests:

To calculate Return on Common Equity, what must be subtracted from Net Profit in the numerator?

In a Fixed Charge Coverage Ratio, what is added to EBIT in the numerator?

If Tax Burden is 0.6 and Interest Burden is 0.8, what is the ratio of Net Income to EBIT?

Which graph type is identified as useful for visualizing changes in the composition of a total value over time?

A decrease in the Cash Conversion Cycle is generally viewed as:

Which ratio relates the market price per share to the company's book value per share?

Which of the following is an Activity Ratio?

Calculate Basic EPS given: Net Income = 500,000, Preferred Dividends = 50,000, Weighted Average Common Shares = 100,000.

The deviation of the effective tax rate from the statutory tax rate is typically caused by:

In financial modeling, which technique is computer-based and generates a distribution of values?

If a company has Sales of 200, Average Assets of 100, and Net Income of 20, what is the Asset Turnover Ratio?

A low Inventory Turnover Ratio generally implies:

Which ratio relates Cash Flow from Operations (CFO) to Total Debt?

Standard Deviation of Net Income is a measure used to assess:

Calculate the P/E ratio if the stock price is 50 and EPS is 2.5.

Operating ROA is calculated as:

What is the key difference between horizontal analysis and vertical analysis?

When comparing two companies, why is ratio analysis preferred over comparing raw financial statement numbers?

Pretax Margin is calculated as:

If Average Assets = 1000 and Average Equity = 500, what is the Financial Leverage Ratio?

Which ratio would be most relevant for a supplier deciding whether to sell goods on credit to a company?

Return on Total Capital (ROTC) is best described as a measure of: