墨尔本大学期中考试试卷.pdfVIP

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 Molitors 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 inv