Question

Multiple Choice Question 37

The calculations are the easy part of a horizontal analysis, the challenge is

gathering the data.

interpreting the results.

both gathering the data and interpreting the results.

Multiple Choice Question 50

The formula for preparing a common-size income statement is

Individual Revenue or Expense Account Balance Operating Income

Individual Revenue or Expense Account Balance Net Income

Individual Revenue or Expense Account Balance Gross Profit

Individual Revenue or Expense Account Balance Net Sales Revenue

neither gathering the data nor interpreting the results.

Multiple Choice Question 53

On a common-size balance sheet, notes receivable is shown as a percentage of

total liabilities.

current liabilities.

total assets.

total stockholders’ equity.

Multiple Choice Question 91

The debt to equity ratio measures the amount of financing provided by creditors relative to

equity earned through from operations.

equity provided by retained earnings.

equity provided by owners.

equity earned through dividends.

Answer 1

37. Interpreting the result.

Gathering data is also, but it is difficult to interpret the result over a period of time

50. Individual Revenue or Expenses Account Balance

    Net Sale Revenue

In common size income statement Each individual revenue and expense is shown as a percentage to sales which is taken as 100%

53. Total Assets

Notes receivable is shown as percentage to Total Asset which taken as 100%

91. Equity provided by Owners.

Debt to Equity shows the relationship between total debt to Shareholders Equity which is share capital plus retained earnings