If Days Sales in Receivables (DSR) is materially

Question 1Not yet answered Points out of 3.00 Remove flagQuestion textIf Days Sales in Receivables (DSR) is materially longer than my company’s credit terms to its customers, this may indicate a collection problem. Select one:TrueFalseQuestion 2Not yet answered Points out of 3.00 Flag questionQuestion textThe only way a company can increase its operating profits per asset dollar is to expand the amount of sales generated from each asset dollar. Select one:TrueFalseQuestion 3Not yet answered Points out of 3.00 Flag questionQuestion textOperating leases are financial statement examples of “off-balance sheet” financing. Select one:TrueFalseQuestion 4Not yet answered Points out of 3.00 Flag questionQuestion textMy company uses LIFO to account for its inventory cost flow. At the end of the year, my inventory is valued on the balance sheet at $1,200,000 and my company’s LIFO Reserve is $200,000. If my company used FIFO instead of LIFO, the value of its inventory at the end of the year would have been approximately $1,000,000. Select one:TrueFalseQuestion 5Not yet answered Points out of 3.00 Flag questionQuestion textMy company is being sued. It is very likely that we will lose the lawsuit and that the lawsuit will cost us approximately $1,000,000. We should recognize this lawsuit as a liability on our balance sheet. Select one:TrueFalseQuestion 6Not yet answered Points out of 3.00 Flag questionQuestion textTo remain in accordance with GAAP, operating leases require footnote disclosure of the future cash flows arising from operating leases. Select one:TrueFalseQuestion 7Not yet answered Points out of 3.00 Flag questionQuestion textIf a company leases assets and its leased assets are all accounted for as Capital Leases, as an analyst I should turn to the Income Statement and look for “Rent Expense” to assess the impact of these capital leases on the company’s financials. Select one:TrueFalseQuestion 8Not yet answered Points out of 3.00 Flag questionQuestion textThe price to earnings ratio (P/E ratio) relates the prices a company charges for its products to the company’s earnings. Select one:TrueFalseQuestion 9Not yet answered Points out of 3.00 Flag questionQuestion textIncreasing my level of debt relative to equity will lead to a decrease in my Return on Equity because of interest expense and its drag on my bottom-line profit. Select one:TrueFalseQuestion 10Not yet answered Points out of 3.00 Flag questionQuestion textCompared to a firm with a capital lease, operating leases help the lessee firm (the firm that is leasing the item) earn a higher return on assets. Select one:TrueFalseQuestion 11Not yet answered Points out of 3.00 Flag questionQuestion textThe term “LIFO liquidation” refers to the transition period when a company converts its inventory accounting system from LIFO to FIFO. Select one:TrueFalseQuestion 12Not yet answered Points out of 3.00 Flag questionQuestion textIf I know my company’s debt ratio, I can calculate/determine the relative proportion of total equity that is in my company’s capital structure. Select one:TrueFalseQuestion 13Not yet answered Points out of 3.00 Flag questionQuestion textFirms that use LIFO must disclose the dollar magnitude of the difference between LIFO and FIFO cost. Select one:TrueFalseQuestion 14Not yet answered Points out of 3.00 Flag questionQuestion textEarning’s measurements like EBITDA ignore some real business costs and can result in an incomplete picture of a company’s true profitability. Select one:TrueFalseQuestion 15Not yet answered Points out of 3.00 Flag questionQuestion textTimes Interest Earned (TIE) indicates a firm’s long-term debt-paying ability from the balance sheet point of view. Select one:TrueFalseQuestion 16Not yet answered Points out of 3.00 Flag questionQuestion textFinancial leverage is beneficial when the company earns more than the incremental after-tax cost of debt. Select one:TrueFalseQuestion 17Not yet answered Points out of 3.00 Flag questionQuestion textA company that has no debt will have a financial leverage ratio of 1.0. Select one:TrueFalseQuestion 18Not yet answered Points out of 3.00 Flag questionQuestion textA steadily rising Days Sales in Inventory (DSI) that exceeds industry averages is generally considered to be a favorable trend. Select one:TrueFalseQuestion 19Not yet answered Points out of 3.00 Flag questionQuestion textBefore computing ROA, analysts isolate a company’s sustainable operating profits by removing non-operating or nonrecurring items from reported income. Select one:TrueFalseQuestion 20Not yet answered Points out of 3.00 Flag questionQuestion textThe distortion of the Current ratio caused by using LIFO inventory costing may be adjusted by subtracting the LIFO reserve from current assets. Select one:TrueFalse

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