AFSB - Chapter 8 questions with
complete solutions graded A+
The larger a contractor's backlog relative to its working capital or shareholders'/owners' equity,
the? - ANS ✔Greater the possibility it could become overextended and default on its obligations
to complete the projects to which it has committed resources
What is a trend analysis? - ANS ✔A trend analysis compares financial data during the 3-5 year
period before the contractor's most recent financial statement
What are the principal financial areas subject to trend analysis? - ANS ✔- major balance sheet
elements (working capital, shareholders'/owners' equity)
- line-item components of balance sheets
- combinations of line-item components of balance sheets
- line-item components of income statements and entire income statements
- financial performance of each construction contract included in the trend analysis period
What are the information sources underwriters can access to perform trend analysis? - ANS ✔-
financial statements covering the trend analysis period
- contract status reports
- a financial statement spreadsheets, called a financial statement comparison form
- a gross profit comparison spreadsheet, called a gross profit comparison form
What is a financial statement spreadsheet? - ANS ✔Also called a financial statement
comparison form, which summarizes balance sheet and income statement data for the trend
analysis period
complete solutions graded A+
The larger a contractor's backlog relative to its working capital or shareholders'/owners' equity,
the? - ANS ✔Greater the possibility it could become overextended and default on its obligations
to complete the projects to which it has committed resources
What is a trend analysis? - ANS ✔A trend analysis compares financial data during the 3-5 year
period before the contractor's most recent financial statement
What are the principal financial areas subject to trend analysis? - ANS ✔- major balance sheet
elements (working capital, shareholders'/owners' equity)
- line-item components of balance sheets
- combinations of line-item components of balance sheets
- line-item components of income statements and entire income statements
- financial performance of each construction contract included in the trend analysis period
What are the information sources underwriters can access to perform trend analysis? - ANS ✔-
financial statements covering the trend analysis period
- contract status reports
- a financial statement spreadsheets, called a financial statement comparison form
- a gross profit comparison spreadsheet, called a gross profit comparison form
What is a financial statement spreadsheet? - ANS ✔Also called a financial statement
comparison form, which summarizes balance sheet and income statement data for the trend
analysis period
