Financial Statement Analysis: A Data Analytics Approach (2024 Release, 1st Edition) – Complete Test Bank Solutions with Explanations for Chapters 1–10

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Test Bank Solution for Financial Statement Analysis, A Data
Analytics Approach, 2024 Release, 1st Edition

by Robert J. Resutek and Vernon J. Richardson

All Questions with Explanations (Chapter 1-10) | Expert Verified
Answers | Graded A+




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TABLE OF CONTENTS
1. Contemporary Financial Statement Analysis and the Need for Data Analytics

2. Using Financial Statements

3. Alternative Data Sources

4. Financial Ratio Analysis

5. Accounting Quality and Working Capital Analysis

6. Evaluation of Noncurrent Assets and Liabilities to Assess Balance Sheet Quality

7. Analysis of Cash Flows

8. Forecasting Pro Forma Financial Statements

9. Introduction to Equity Valuation

10. Quantitative and Qualitative Sensitivity Analysis to Assess Forecast Assumptions

Additionally, the textbook includes the following appendices:

 Appendix A: Excel Tutorial (Formatting, Sorting, Filtering, and Pivot Tables)

 Appendix B: Tableau Tutorial

 Appendix C: Installing Excel’s Analysis ToolPak Add-In

This comprehensive structure integrates financial statement analysis with data analytics, providing students with
practical skills in both areas.




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Section 1: Contemporary Financial Statement Analysis and the Need for Data Analytics Question 1

– Which of the following best describes the primary goal of financial statement analysis?

– A. To prepare financial statements for regulatory compliance
B. To assess the financial health and performance of an organization
C. To determine the market value of a company's stock
D. To manage daily cash flows

– Answer: B. To assess the financial health and performance of an organization
– Explanation: Financial statement analysis aims to evaluate an organization's financial health and
performance by examining its financial statements, aiding stakeholders in decision-making.



Question 2

– Data analytics in financial statement analysis primarily helps in:

– A. Reducing the need for financial audits
B. Enhancing the accuracy and depth of financial insights
C. Eliminating manual data entry
D. Complying with tax regulations

– Answer: B. Enhancing the accuracy and depth of financial insights

– Explanation: Data analytics leverages advanced techniques to analyze large datasets, providing more
accurate and comprehensive insights into financial performance and trends.



Question 3




– Answer: B.
Using statistical models to forecast future financial outcomes

– Explanation: Predictive analytics involves using historical data and statistical models to predict future
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financial trends and outcomes.



Question 5

– Which technology is most commonly associated with data analytics in financial statement analysis?

– A. Blockchain
B. Machine Learning
C. Virtual Reality
D. 3D Printing

– Answer: B. Machine Learning

– Explanation: Machine learning is a key technology in data analytics, enabling the analysis of complex
financial data to uncover patterns and make predictions.



Question 6




–
Explanation: Implementing data analytics can be challenging due to factors like limited data, high costs of
tools, and a shortage of skilled analysts.



Question 8

– Descriptive analytics in financial statement analysis is primarily used to:

– A. Predict future financial trends
B. Describe past and current financial performance

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