CHAPTER 5

MULTIPLE CHOICE

1.Statements in which all items are expressed only in relative terms (percentages of a base) are termed:

a.

Vertical Statements

b.

Horizontal Statements

c.

Funds Statements

d.

Common-Size Statements

e.

none of the answers are correct

ANS:D

2.In financial statement analysis, ratios are:

a.

the only type of analysis where industry data are available

b.

absolute numbers converted to a common base

c.

fractions usually expressed in percent or times

d.

the only indication of the financial position of the firm

e.

none of the answers are correct

ANS:C

3.Denver Dynamics has net income of 2,000,000. Oakland Enterprises has net income of 2,500,000. Which of the following best compares the profitability of Denver and Oakland?

a.

Oakland Enterprises is 25%...