Question

1. You are not overwhelmed with MacDonald’s numbers so you look at Wendy’s financial statements too. You decide to analyze their debt situation by creating a ratio of long-term debt to earnings before interest and taxes. Where can you find the amount of long-term debt, and the amount of earnings before interest and taxes respectively?

A. Income Statement; Income Statement

B.Balance Sheet; Income Statement

C.Statement of Cash Flows; Income Statement

D.Balance Sheet, Statement of Cash Flows

E. Income Statement; Balance Sheet

F.Balance Sheet; Statement of Stockholder’s Equity

2.  You decide maybe it is safer to buy bonds. You consider buying Macy’s bonds. But first, you want to see how much working capital Macy’s has. Where can you find the amount of working capital?

A. Income Statement.

B. Balance Sheet.

C. Statement of Cash Flows.

D. Statement of Stockholder’s Equity.

3. An increase in Accounts Receivable is associated with ______in cash; an increase in dividends paid to shareholders is associated with ______in cash

A.Increase; decrease

B. Decrease; decrease

C. Increase; increase

D. Decrease; increase

Answer 1

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