Financial Analysis Techniques

Which of the following is least likely a characteristic of vertical common-size statements?

Which of the following statements regarding graphical analysis is most likely incorrect?

Which of the following is least likely an example of a limitation of financial ratios?

An analyst wishes to examine a firm’s ability to fulfil its short term obligations.  Which of these types of ratios should she focus on?

Which of the following ratios would be the most useful in determining if a company can fulfil its interest obligations.

Sussix Corp had an average days of inventory on hand of 13 days last year. The company wishes to match the industry average of 10 days for the coming year. Which of the following events will most likely to help Sussix achieve this goal?

Which of the following is not a pure ratio?

An analyst would like to evaluate the management of company X for their ability to generate profits.  The analyst  feels that taxes are out of the management’s control.  Which profitability ratio is most appropriate to evaluate the management?

Which of the following ratios is more useful for determining future profitability of a firm?

In the latest financial year, Wendom Corp had a net profit margin of 0.3.  The average total assets for the year was $1.5 million, and average total equity for the year was $0.5 million.  The total asset turnover was 2.2.

The ROE for Wendom for the year is closest to:

A company recently reduced its debt by redeeming some of its outstanding bonds.  All else equal, what is the most likely effect on the firm’s ROE?

Which of the following valuation ratios is likely the least relevant for an early stage company?

SPANS Corp has maintained a consistent dividend payout ratio of 0.4 for the past 10 years, and is expected to maintain this in the future.

SPANS’ ROE is forecast to be 20% for the foreseeable future.

What is the sustainable growth rate of the company?

ShamShung is conglomerate whose main business is in property development in emerging countries.

Which of these entities is ShamShung required to report segment data under both IFRS and US GAAP?

An analyst would like to forecast the future performance of a firm in the event a proposed change in tax regime materialises. This is an example of a:

An analyst calculated the liquidity ratios of Company X and wrote the number down on a piece of paper.

The numbers read:   0.34,  0.65, 0.77

Which are the most probable ratios, in this sequence?