SAINT ACC498 full course [ all diss all assinments essay and FINANCIAL ANALYSIS PROJECT pretest and final exam ]

module 1

Discussion question 1

Which of the major financial statements do you think is the most
important? In other words if you were looking at investing in a company
which financial statement would you look at first? You can even break
it down to one part of a financial statement. I will give my answer at
the end of the module. module 2

Discussion question 2

You are talking to someone who knows nothing about generally
accepted accounting principles. Explain to this person what GAAP is.
Also explain the difference between accrual and cash-basis accounting.
are there certain businesses that would more then likely use cash-basis
accounting?
module 3Discussion question 3

Explain what a contingent liability is and how it affects
corporations. Also describe retained earnings and how it is affected by
dividends. What is the main differences between equity and
liabilities?module 4

Discussion question week 4

Explain what an intangible asset and why they are so important.
Also name and explain some of the more common intangible assets.module 5Discussion question week 5

Explain what an extraordinary item is and how you account for it.
Also explain how you account for a discontinued operation.
mosule 6Discussion question 6

Describe the statement of cash flows. Is there any part that is more important then the others.

mod 7

Discussion question 7

Explain the importance of liquidity. What are the more important
ratios? Is there one that is your favorite?
mod 8

Discussion question week 8

Describe equity valuation and how you may use it in your future.assignmentsCHAPTER 1 FINANCIAL STATEMENT ANALYSISEXERCISE 1-3 AND 1-6 PROBLEM 1-8CHAPTER 2 FINANCIAL STATEMENT ANALYSISPROBLEM 2-4PROBLEM 2-16CHAPTER 3 FINANCIAL STATEMENT ANALYSISPROBLEM 3-3 AND 3-4CHAPTER 3 FINANCIAL STATEMENT ANALYSISPROBLEM 3-3 AND 3-4CHAPTER 4 AND 5 FINANCIAL STATEMENT ANALYSISPROBLEM 4-7 ANDPROBLEM 5- 2CHAPTER 6 FINANCIAL STATEMENT ANALYSISPROBLEM 6-2CHAPTER 7 AN D 8 FINANCIAL STATEMENT ANALYSISPROBLEM 7-3 ANDPROBLEM 8-2CHAPTER 9 FINANCIAL STATEMENT ANALYSISPROBLEM 9-2CHAPTER 11 FINANCIAL STATEMENT ANALYSISPROBLEM 11-3core value essayIn corporation accountant are responsible for
identifying measuring recording and communicating financial and other
related information to all interested stake holders write a substantial
paragraph [ 200 to 300 words ] answering the following questions1 why are the value of responsible stewardship and integrity imperative as they execute these responsibilitySAINT ACC498 MODULE 6 financial analysis projectSAINT ACC498 MODULE 6 financial analysis projectFINANCIAL ANALYSIS PROJECTUnderstanding Corporate Annual Reports- A Financial Analysis Project (7th ed.) by William R. PasewarkRead
pages 40 through 46 and complete all the requirements on these pages.
The answers should be completed in an excel spreadsheet, wich will be
turned in at the end of module 6.As you advance through this
project, please use labeled sheet tabs in the same spreadsheet file for
each section you complete. For example: General information would be your first sheet (general information) Internet information would be your next sheet (internet information) Income statement would be the next (income statement)pretest Which of the following is true concerning bond covenants?
Bond
covenants are restrictions placed on bondholders to protect rights of equity
holders.
Violation
of a bond covenant requires that a company declares bankruptcy.
If
a company violates a bond covenant, it means it has failed to make interest or
principal repayments on debt in a timely manner.
Bond
covenants are legal restrictions placed in order to minimize the risk of
default on bonds.
Points Received: 2 of 2
Comments:
Question 2. Question
:
When preparing a projected income statement, which of the
following additional information, other than the financial statements would
probably not be relevant?
The
competitive environment
New
versus old store mix
Expected
capital expenditure
Expected
level of macroeconomic activity
Points Received: 2 of 2
Comments:
Question 3. Question
:
Which of the following combinations of accounting practices
will lead to the highest reported earnings in an inflationary environment?
Choice
A
Choice
B
Choice
C
Choice
D
Points Received: 2 of 2
Comments:
Question 4. Question
:
Reling Company reports the following information as of
12/31/05
The book value per
share of common stock is:
$12.20
$12.40
$15.25
$15.50
Points Received: 2 of 2
Comments:
Question 5. Question
:
You have been provided the following information about Wert
Inc.
Return on Assets for 2006 is:
13.71%
12.68%
10.77%
13.21%
Points Received: 2 of 2
Comments:
Question 6. Question
:
An analyst should
treat preferred stock on a firm’s balance sheet as debt when calculating
leverage ratios if the preferred stock is:
redeemable
by shareholders
convertible
into common stock
issued
at a variable dividend rate
callable
by the issuer
Points Received: 2 of 2
Comments:
Question 7. Question
:
Which of the following will affect observed price earnings
ratio (lagged ratio):
I. Quality of
earnings
II. Business risk
III. Risk free rate of interest
IV. Expected growth
All
of the above
IN II, III and IV
II
and IV
I,
II and IV
Points Received: 0 of 2
Comments:
Question 8. Question
:
A lessee must account for a lease as a capital lease if:
I. lease transfers ownership to lessee at the end of the
lease.
II. lease contains option to purchase the asset at the end
of the lease at a bargain price.
III. lease is longer than 20 years.
IV. present value of lease is greater than 10% of lessee’s
assets.
I
and II
I,
II and III
I,
III and IV
I,
II and IV
Points Received: 2 of 2
Comments:
Question 9. Question
:
Which of the following would be considered the most
discretionary of the following cash outflows?
Interest
payment
Payment
to suppliers
Repurchase
of stock
Dividend
payments
Points Received: 2 of 2
Comments:
Question 10. Question
:
Parent Company Inc. successfully bids for Child Company Inc.
in year X1. Parent Company Inc. has purchased all of Child’s shares outstanding
for $8,500. Following are excerpts from both companies’ financial statements
for year X1, prior to the acquisition.
Also assume the following information: the acquisition was
accounted for using the purchase method. $1,500 of the excess price relates to
depreciable assets, and those assets have an additional useful life of 10 years
at the time of the acquisition. Parent Company Inc. uses the straight line
depreciation method and has a 34% tax rate. The combined net income for both
companies for year X2 (excluding any expenses that need to be recorded as a
result of the purchase method accounting for the merger) was $1,560.
What would be total assets in the consolidated financial
statements for the date on which the merger became effective?
$50,008
$49,498
$41,508
$44,113
Points Received: 2 of 2
Comments:
Question 11. Question
:
WidgetCo and Tools Inc. both operate in the same industry.
They are capital-intensive companies producing widgets. Below are selected data
Which of the following statements is ?
Widget
has higher RNOA than Tools
Widget
has lower RNOA than Tools
Widget
has same RNOA as Tools
Insufficient
information to calculate RNOA
Points Received: 2 of 2
Comments:
Question 12. Question
:
One advantage of LIFO over FIFO under normal conditions is
that:
it
reports higher retained earnings.
it
results in higher cash flows.
it
results in higher current ratios.
it
results in higher gross margins.
Points Received: 2 of 2
Comments:
Question 13. Question
:
Which of the following is not a common tool used in
financial statement analysis?
Random
walk analysis
Ratio
analysis
Common
size statement analysis
Trend
series analysis
Points Received: 2 of 2
Comments:
Question 14. Question
:
The treasurer of Simmons Corporation, a newly formed
software company is trying to ascertain Simmons cash flows for the next three
months. Expected sales are:
50% of sales are made for cash. Simmons expects to receive
25% in the month following the sale and 20% in the second month following the
sale. The remaining 5% are expected to be un-collectible. Gross margin is 20%,
and purchases are made one month prior to sale. Purchases are paid one month
after received.
Cash outflows in March for purchases will be:
$240
$220
$200
$176
Points Received: 2 of 2
Comments:
Question 15. Question
:
Which of the following is a change in an accounting
estimate?
I. A change from straight line depreciation to an
accelerated depreciation method.
II. A change in estimated salvage value of depreciable
asset.
III. A change in estimated useful life of an asset.
IV. Recording depreciation for the first time on machinery
purchased five years ago.
I,
II, III and IV
II,
III and IV
I,
III and IV
II
and III
Points Received: 2 of 2
Comments:
Question 16. Question
:
If a company changes the useful life of its assets from 10
years to 12 years, this will be recorded as:
a
non-recurring gain.
an
extraordinary item.
a
change in accounting principle.
None
of the above
Points Received: 2 of 2
Comments:
Question 17. Question
:
Which of the following represents an investing
activity in the statement of cash flows
depreciation
of plant assets
sale
of plant assets at a loss
stock
dividend
purchase
of inventory
Points Received: 2 of 2
Comments:
Question 18. Question
:
Variability in earning numbers:
Is
desirable as it increases variance of earnings and hence value of stock options
Increases
if a company increases its operating leverage
Increases
if a company decreases its financial leverage
Is
independent of operating leverage
Points Received: 2 of 2
Comments:
Question 19. Question
:
What would be the net income in the consolidated income
statement for year X2 assuming any excess purchase price relates to goodwill,
and goodwill was found to be impaired by $830?
$1,461
$1,560
$1,012.2
$730
Points Received: 2 of 2
Comments:
Question 20. Question
:
Fristy Corporation has a book value of equity of $5,000 at
the beginning of 2005, and net income of $1,000 for year ended 2005. It pays no
dividends and its cost of equity capital is 10%. It expects return on beginning
of year equity to remain constant for 2006 and 2007 and decrease to 10%
thereafter. What should its price to book value be at the end of 2005 (pick
closest number)?
1.0
1.05
1.09
1.19
Points Received: 2 of 2
Comments:
Question 21. Question
:
Which of the following is not a common characteristic of a
company choosing to use LIFO rather than FIFO?
Larger
inventory balances
Higher
variability in inventory balances
Greater
expected tax savings
Larger
in size
Points Received: 2 of 2
Comments:
Question 22. Question
:
As a general rule, revenue is normally recognized when it
is:
measurable
and earned.
measurable
and received.
realizable
and earned.
realizable.
Points Received: 2 of 2
Comments:
Question 23. Question
:
An asset is considered to be liquid if:
it
is readily converted into a current asset.
it
is an intangible asset.
it
is readily converted into cash.
it
is part of retained earnings.
Points Received: 2 of 2
Comments:
Question 24. Question
:
The reliability of a
short-term cash forecast depends most heavily on the quality of:
Cost
of goods sold forecast
Current
ratio forecast
Sales
forecast
Shares
outstanding forecast
Points Received: 2 of 2
Comments:
Question 25. Question
:
Which of the following does not represent future expected
cash inflows?
accounts
receivable
prepaid
expenses
inventory
notes
receivable
Points Received: 2 of 2
Comments: final examThe two primary qualities of accounting information to make
it useful for decision making are:
reliability and comparability.
relevance and reliability.
materiality and comparability.
full disclosure and relevance.
Points Received: 10 of 10
Comments:
Question 2. Question
: Which of the following does
not represent future expected cash inflows?
accounts receivable
prepaid expenses
inventory
notes receivable
Points Received: 10 of 10
Comments:
Question 3. Question
: Which of the following is true
concerning bond covenants?
Bond covenants are restrictions placed on
bondholders to protect rights of equity holders.
Violation of a bond covenant requires that a
company declares bankruptcy.
If a company violates a bond covenant, it
means it has failed to make interest or principal repayments on debt in a
timely manner.
Bond covenants are legal restrictions placed
in order to minimize the risk of default on bonds.
Points Received: 10 of 10
Comments:
Question 4. Question
: Pitfalls when forecasting
earnings include failure to consider
I. capital adequacy
II. capacity constraints
III. anticipated return on equity
IV. new management
I and III
II and IV
I, III and IV
I, II and III
Points Received: 10 of 10
Comments:
Question 5. Question
: Which of the following might
give rise to off-balance sheet financing?
I. Long-term operating leases
II. Sale of receivables without recourse
III. Through-put agreements
IV. Purchase commitments
I, II, III and IV
I, II and IV
II, III and IV
I, III and IV
Points Received: 10 of 10
Comments:
Question 6. Question
: Given the following
information:

Return on common
equity for 2005 is:
11.42%
10.0%
11.0%
10.47%
Points Received: 10 of 10
Comments:
Question 7. Question
: Wilco Company reports the
following:
Dividend payout ratio for 2005 was:
27%
12%
22.2%
Not determinable
Points Received: 10 of 10
Comments:
Question 8. Question
: The following information
should be used according to the provisions of SFAS 95 (Statement of Cash flows)
and using the following data.

What is net cash flow from investing?
$10,000
$5,000
($5,000)
($15,000)
Points Received: 10 of 10
Comments:
Question 9. Question
: Which of the following is
likely to be the most informative source if you were interested in a company’s
business plan or strategy?
Auditor’s letter
Management discussion and analysis
Proxy statement
Footnotes
Points Received: 10 of 10
Comments:
Question 10. Question
: The equity method of
accounting for investments requires:
Investment should be marked to market each
accounting period.
Pro-rata share of investee’s earnings should
be recorded as investment income.
Company should not have significant influence
over investee.
Goodwill related to purchase of investee stock
to be recorded separately on balance sheet.
Points Received: 10 of 10
Comments:
Question 11. Question
: Which of the following
represents an investing
activity in the statement of cash flows
depreciation of plant assets
sale of plant assets at a loss
stock dividend
purchase of inventory
Points Received: 10 of 10
Comments:
Question 12. Question
: The treasurer of Simmons
Corporation, a newly formed software company is trying to ascertain Simmons
cash flows for the next three months. Expected sales are:
50% of sales are made for cash. Simmons expects to receive
25% in the month following the sale and 20% in the second month following the
sale. The remaining 5% are expected to be un-collectible. Gross margin is 20%,
and purchases are made one month prior to sale. Purchases are paid one month
after received.
Cash outflows in March for purchases will be:
$240
$220
$200
$176
Points Received: 10 of 10
Comments:
Question 13. Question
: Company ABC acquires company
XYZ on 12/31/06 in a share-for-share transaction worth $10M. On 12/31/06, XYZ
financial statements reported the following:
At the time of acquisition, the fair value of XYZ’s assets
equals its book values, except for plant, property and equipment which has a
fair value $2M higher than its book value. Goodwill is expected to be amortized
over 10 years, and the average life of depreciable assets is 10 years.
If ABC uses purchase accounting to record the acquisition,
the amount of goodwill that will appear on its balance sheet as of 12/31/06
with respect to the acquisition of XYZ will be:
$0
$2M
$4M
$6M
Points Received: 10 of 10
Comments:
Question 14. Question
: Beginning and ending accounts
receivable are $76,000 and $42,000, respectively. Sales for the period total
$384,000, of which $40,000 was directly for cash. How much cash was collected
from making sales and collecting accounts receivable?
$344,000
$418,000
$378,000
$376,000
Points Received: 10 of 10
Comments:
Question 15. Question
: Which of the following would
be considered the most discretionary of the following cash outflows?
Interest payment
Payment to suppliers
Repurchase of stock
Dividend payments
Points Received: 10 of 10
Comments:
Question 16. Question
: Which of the following is the
best measure of operating
efficiency?
Return on net operating assets
Return on equity
Return on sales
Return on inventory
Points Received: 10 of 10
Comments:
Question 17. Question
: Assume all assets are
operating assets; all current liabilities are operating liabilities.

Return on net
operating assets for 2005 is:
11.30%
12.73%
9.93%
11.19%
Points Received: 10 of 10
Comments:
Question 18. Question
: Which of the following
actions, all other things being equal, will increase the need for a company to
borrow money in the short-term?
I. Extending more
credit to customers
II. Increasing inventory turnover
III. Expensing advertising expenses rather than capitalizing
them
IV. Contributing more to pension plan
I, II, III
I and III
I, III and IV
I and IV
Points Received: 10 of 10
Comments:
Question 19. Question
: What would be the net income
in the consolidated income statement for year X2 assuming any excess purchase
price relates to goodwill, and goodwill was found to be impaired by $830?
$1,461
$1,560
$1,012.2
$730
Points Received: 10 of 10
Comments:
Question 20. Question
: The capitalization of
interest cost during construction:
increases future net income.
decreases future depreciation expense.
increases net income during construction
phase.
decreases assets during construction phase.
Points Received: 10 of 10
Comments:
Question 21. Question
: One advantage of LIFO over
FIFO under normal conditions is that:
it reports higher retained earnings.
it results in higher cash flows.
it results in higher current ratios.
it results in higher gross margins.
Points Received: 10 of 10
Comments:
Question 22. Question
: Which of the following best
describes the current ratio?
debt ratio
operating performance ratio
liquidity ratio
efficiency ratio
Points Received: 10 of 10
Comments:
Question 23. Question
: Which of the following
statements about stock dividends is true?
Stock dividends increase the number of shares
outstanding.
Stock dividends are more valuable than stock
splits.
Stock dividends are recorded as a reduction in
cash.
Stock dividends are dividends given in the
form of stock from another company.
Points Received: 10 of 10
Comments:
Question 24. Question
: Which of the following factors
is least likely to affect earnings persistence?
Changing price levels
Extraordinary items
Usual operating costs
Accounting methods used
Points Received: 10 of 10
Comments:
Question 25. Question
: Variability in earning
numbers:
Is desirable as it increases variance of
earnings and hence value of stock options
Increases if a company increases its operating
leverage
Increases if a company decreases its financial
leverage
Is independent of operating leverage
Points Received: 10 of 10
Comments: