D366 Financial Statement Analysis - Set 4 - Part 1

Test your knowledge of technical writing concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 1:

To show a company’s profitability

To summarize a company's revenues and expenses

To provide a snapshot of a company’s financial position at a specific point in time

Question 2:

Equipment

Inventory

Goodwill

Question 3:

The company relies heavily on debt for financing

The company is highly liquid

The company has low financial risk

Question 4:

Land

Inventory

Trademarks

Question 5:

To show the financial position of a company at a point in time

To measure profitability over a specific period

To outline changes in cash flow

Question 6:

Return on assets

Debt-to-equity ratio

Current ratio

Question 7:

Increases EPS

Decreases EPS

Has no effect on EPS

Question 8:

Increasing interest expense

Decreasing selling expenses

Decreasing revenue

Question 9:

Accounts receivable

Cash

Inventory

Question 10:

Statement of cash flows

Income statement

Statement of retained earnings

Question 11:

Increases shareholders' equity

Decreases shareholders' equity

Has no effect on shareholders' equity

Question 12:

Return on assets

Current ratio

Gross profit margin

Question 13:

The company is generating insufficient cash from operations

The company is experiencing financial trouble

The company is investing in long-term assets

Question 14:

Balance sheet

Income statement

Statement of retained earnings

Question 15:

To assess how efficiently a company generates profit from its total assets

To determine how well a company manages its liabilities

To calculate the amount of cash available for dividend payments

Question 16:

ratio represent?

The market value of a company compared to its book value

The company’s equity compared to its total liabilities

The ratio of a company's current price to its earnings per share

Question 17:

affect a company’s gross profit margin?

Increases gross profit margin

Decreases gross profit margin

Has no effect on gross profit margin

Question 18:

To assess a company’s financial position at a specific point in time

To show the company’s cash inflows and outflows from operating, investing, and financing activities

To show the company’s retained earnings

Question 19:

Increases net income

Decreases net income

Has no effect on net income

Question 20:

Debt-to-equity ratio

Return on equity

Current ratio

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