Exam (elaborations) MBA MKT640

MBA MKT 640 / MKT640 VERTICAL ANALYSIS Question 1 In a common size income statement, the 100% figure is: cost of goods sold net sales gross profit net income Question 2 Vertical analysis is a technique that expresses each item in a financial statement: starting with the highest value down to the lowest value as a percent of the item in the previous year as a percent of a base amount none of the above Question 3 Vertical analysis is also known as: trend analysis perpendicular analysis common size analysis none of the above Question 1 The best way to study the relationship of the components within a financial statement is to prepare: common size statements a trend analysis profitability analysis none of the above Question 2 Vertical analysis is a technique that expresses each item in a financial statement: as a percent of the item in the previous year starting with the highest value down to the lowest value as a percent of a base amount none of the above Question 3 In performing a vertical analysis, the base for prepaid expenses is: prepaid expenses in a previous year total current assets total liabilities total assets Question 4 In a common size balance sheet, the 100 percent figure is: total assets total liabilities total property, plant and equipment none of the above Question 5 A balance sheet that displays only component percentages is called a ________ balance sheet. trendy common size comparative condensed Question 1 In performing a vertical analysis, the base for cost of goods sold is: net sales total expenses total selling expenses total revenues Question 2 Vertical analysis is a technique that expresses each item in a financial statement: starting with the highest value down to the lowest value in dollars and cents as a percent of a base amount as a percent of the item in the previous year Question 3 Comparisons of data within a company are an example of the following comparative basis: intercompany industry averages interregional intracompany Question 4 In performing a vertical analysis, the base for sales returns and allowances is: net sales sales revenue sales discounts none of the above Question 5 In a common size financial statement, which of the following is given a percentage of 100 percent? Total liabilities Net income Total assets Cost of goods sold Question 6 In performing a vertical analysis, the base for sales revenues on the income statement is: sales revenue net sales net income none of the above Question 7 In vertical analysis: the same base is used across all financial statements analyzed a base amount is required a base amount is optional none of the above Question 8 In performing a vertical analysis, the base for prepaid expenses is: prepaid expenses in a previous year total assets total current assets total liabilities Consider the 2005 Operating Data for Manning Corporation below: Net Sales $500,000 Cost of goods sold 320,000 Operating expenses 120,000 Net income 60,000 Question 1 Finish the schedule showing a vertical analysis for 2005. Net sales $500,000 Cost of goods sold 320,000 Gross profit Operating expenses 120,000 Net income 60,000 Answer 1: 100% 100 Answer 2: 64% 64 Answer 3: 36% 36 Answer 4: 24% 24 Answer 5: 12% 12 Answer 6: $180,000 180,000 Question 2 In performing a vertical analysis, the base for sales revenues on the income statement is: net income net sales sales revenue none of the above Question 3 In performing a vertical analysis, the base for cost of goods sold is: total revenues total selling expenses net sales none of the above CVE, Inc. has the following income statement (in millions): CVE, INC. Income Statement For the Year Ended December 31, 2014 Question 4 Using vertical analysis, what percentage is assigned to cost of goods sold? 138% 30% 100% 150% Question 5 In a common size income statement, the 100% figure is: net income gross profit net sales none of the above Consider the 2005 Operating Data for Manning Corporation below: Net Sales $500,000 Cost of goods sold 320,000 Operating expenses 120,000 Net income 60,000 Question 1 Finish the schedule showing a vertical analysis for 2005. Net sales $500,000 Cost of goods sold 320,000 Gross profit Operating expenses 120,000 Net income 60,000 Answer 1: 100% 100 Answer 2: 64% 64 Answer 3: 36% 36 Answer 4: 24% 24 Answer 5: 12% 12 Answer 6: $180,000 180,000 Question 2 In performing a vertical analysis, the base for sales revenues on the income statement is: net income net sales sales revenue none of the above Question 3 In performing a vertical analysis, the base for cost of goods sold is: total revenues total selling expenses net sales none of the above CVE, Inc. has the following income statement (in millions): CVE, INC. Income Statement For the Year Ended December 31, 2014 Question 4 Using vertical analysis, what percentage is assigned to cost of goods sold? 138% 30% 100% 150% Question 5 In a common size income statement, the 100% figure is: net income gross profit net sales none of the above Question 1 A balance sheet that displays only component percentages is called a ________ balance sheet. condensed comparative common size none of the above Question 2 In performing a vertical analysis, the base for prepaid expenses is: total liabilities total assets prepaid expenses in a previous year total current assets CVE Corporation, Inc. has the following income statement (in millions): CVE CORPORATION, INC. Income Statement For the Year Ended December 31, 2014 Question 3 Using vertical analysis, what percentage is assigned to cost of goods sold? 33% 100% 30% 67% Question 4 In a common size balance sheet, the 100 percent figure is: total liabilities total current assets total assets total property, plant and equipment Question 5 In vertical analysis, the base amount for salaries and wages expense is generally: net income. net sales. salary & wages expense in a previous year. none of the above Question 6 The best way to study the relationship of the components within a financial statement is to prepare: a trend analysis profitability analysis common size statements none of the above Consider the 2005 Operating Data for Manning Corporation below: Net Sales $500,000 Cost of goods sold 320,000 Operating expenses 120,000 Net income 60,000 Question 7 Finish the schedule showing a vertical analysis for 2005. Net sales $500,000 Cost of goods sold 320,000 Gross profit Operating expenses 120,000 Net income 60,000 Answer 1: 100% 100 Answer 2: 64% 64 Answer 3: 36% 36 Answer 4: 24% 24 Answer 5: 12% 12 Answer 6: $180,000 180,000 Question 8 In performing a vertical analysis, the base for sales returns and allowances is: sales discounts net sales total revenues none of the above Question 1 Vertical analysis is a technique that expresses each item in a financial statement: as a percent of a base amount starting with the highest value down to the lowest value as a percent of the item in the previous year none of the above Question 2 In performing a vertical analysis, the base for cost of goods sold is: total selling expenses total revenues net sales none of the above Question 3 In vertical analysis, the base amount for salaries and wages expense is generally: gross profit. salary & wages expense in a previous year. net sales. none of the above Question 4 The best way to study the relationship of the components within a financial statement is to prepare: a trend analysis ratio analysis common size statements none of the above Question 5 The following schedule is a display of what type of analysis? Amount Percent Current assets $100,000 25% Property, plant, and equipment 300,000 75% Total assets $400,000 100% Horizontal analysis Vertical analysis Differential analysis Ratio analysis CVE Corporation, Inc. has the following income statement (in millions): CVE CORPORATION, INC. Income Statement For the Year Ended December 31, 2014 Question 6 Using vertical analysis, what percentage is assigned to cost of goods sold? 33% 100% 30% 38% Question 7 In performing a vertical analysis, the base for prepaid expenses is: total assets total current assets prepaid expenses in a previous year none of the above Question 8 A balance sheet that displays only component percentages is called a ________ balance sheet. trendy condensed common size none of the above Question 1 In performing a vertical analysis, the base for cost of goods sold is: total selling expenses total expenses net sales none of the above Question 2 The best way to study the relationship of the components within a financial statement is to prepare: common size statements profitability analysis ratio analysis none of the above Question 3 Vertical analysis is a technique that expresses each item in a financial statement: starting with the highest value down to the lowest value as a percent of a base amount as a percent of the item in the previous year none of the above CVE Corporation, Inc. has the following income statement (in millions): CVE CORPORATION, INC. Income Statement For the Year Ended December 31, 2014 Question 4 Using vertical analysis, what percentage is assigned to cost of goods sold? 30% 38% 67% 33% Question 5 Comparisons of data within a company are an example of the following comparative basis: interregional intracompany intercompany none of the above