Test Bank For
Financial Statement Analysis A Data Analytics Approach 2024 Release By Robert Resutek and
Vernon Richardson
Chapter 1-10 Answers are at the End of Each Chapter
Chapter 1
Student name:__________
1) Financial statement analysis (FSA) is the process of using analytical techniques to examine
and compare financial statements and other relevant data to evaluate the past and predict the
future for decision-making purposes.
⊚ true
⊚ false
2) In general, it is important to master the past before attempting to forecast the future.
⊚ true
⊚ false
3) Customers use financial statement analysis to determine if they will be paid for the products
or services they provide.
⊚ true
⊚ false
4) Using a company’s past performance as a benchmark for the company’s current performance
is an appropriate diagnostic analytics technique.
⊚ true
⊚ false
5) Which of these stakeholders is most interested in performing financial statement analysis to
address the question of whether trade credit should be extended?
A) Supplier or vendor
B) Shareholder
C) Bank Lender
D) Employee
1
,6) “Master the Past” from the FSA-AMPS model includes which of the following types of
analytics?
A) Descriptive Analytics and Diagnostic Analytics
B) Prescriptive Analytics and Diagnostic Analytics
C) Descriptive Analytics and Predictive Analytics
D) Diagnostic Analytics and Predictive Analytics
7) “Predict the Future” from the FSA-AMPS model includes which of the following types of
analytics?
A) Descriptive Analytics and Diagnostic Analytics
B) Prescriptive Analytics and Diagnostic Analytics
C) Prescriptive Analytics and Predictive Analytics
D) Diagnostic Analytics and Predictive Analytics
8) In which component of the AMPS model does sensitivity analysis fit?
A) Ask the Question
B) Master the Data
C) Perform the Analysis
D) Share the Story
9) Using a visualization to communicate the results of cash flow analysis is an example of
which component of the AMPS model?
A) Ask the Question
B) Master the Data
C) Perform the Analysis
D) Share the Story
10) What happens to Bank of America’s profits if the interest rates change in the future from
three to four percent? This question is an example of what type of analytics?
A) Descriptive analytics
B) Diagnostic analytics
C) Predictive analytics
D) Prescriptive analytics
2
,11) Determining the sensitivity of net income at a bank to potential changes in interest rates
would be an example of what type of analytics?
A) Prescriptive analytics
B) Descriptive analytics
C) Diagnostic analytics
D) Predictive analytics
12) Determining the intrinsic value of a stock based on forecasted financial performance and
uncertainty would be an example of what type of analytics?
A) Prescriptive analytics
B) Descriptive analytics
C) Diagnostic analytics
D) Predictive analytics
13) Forecasting sales and profits over the next ten years are examples of which of the following
analytics types?
A) Prescriptive analytics
B) Descriptive analytics
C) Diagnostic analytics
D) Predictive analytics
14) Which of the following is not one of the five forces?
A) Bargaining power of employees
B) Threat of new entrants
C) Bargaining power of buyers
D) Bargaining power of suppliers
15) If there are low legal barriers and a replicable business model, which of the following five
forces would be strong?
A) Threat of substitutes
B) Threat of new entrants
C) Bargaining power of buyers
D) Bargaining power of suppliers
3
, 16) If there are homogenous products and low switching costs, which of the following five forces
would be strong?
A) Threat of substitutes
B) Threat of new entrants
C) Bargaining power of buyers
D) Bargaining power of suppliers
17) If there is high supplier power (with respect to their five forces), which of the following
financial statement characteristics will be shown?
A) Higher accounts payable turnover ratios
B) Higher accounts receivable turnover ratios
C) Low long-term asset values
D) High inventory turnover ratios
18) If there is high buyer power (with respect to their five forces), which of the following
financial statement characteristics will be shown?
A) Lower accounts payable turnover ratios
B) Lower accounts receivable turnover ratios
C) Low long-term asset values
D) High inventory turnover ratios
19) Which of the following includes the collection of information that is relevant to the
company’s profitability and financial condition?
A) Data incorporation
B) Data reliability
C) Data identification
D) Data linking
20) Which of the following investigates the reason why past performance realizations are noted
in the financial statements?
A) Prescriptive analytics
B) Descriptive analytics
C) Diagnostic analytics
D) Predictive analytics
4
Financial Statement Analysis A Data Analytics Approach 2024 Release By Robert Resutek and
Vernon Richardson
Chapter 1-10 Answers are at the End of Each Chapter
Chapter 1
Student name:__________
1) Financial statement analysis (FSA) is the process of using analytical techniques to examine
and compare financial statements and other relevant data to evaluate the past and predict the
future for decision-making purposes.
⊚ true
⊚ false
2) In general, it is important to master the past before attempting to forecast the future.
⊚ true
⊚ false
3) Customers use financial statement analysis to determine if they will be paid for the products
or services they provide.
⊚ true
⊚ false
4) Using a company’s past performance as a benchmark for the company’s current performance
is an appropriate diagnostic analytics technique.
⊚ true
⊚ false
5) Which of these stakeholders is most interested in performing financial statement analysis to
address the question of whether trade credit should be extended?
A) Supplier or vendor
B) Shareholder
C) Bank Lender
D) Employee
1
,6) “Master the Past” from the FSA-AMPS model includes which of the following types of
analytics?
A) Descriptive Analytics and Diagnostic Analytics
B) Prescriptive Analytics and Diagnostic Analytics
C) Descriptive Analytics and Predictive Analytics
D) Diagnostic Analytics and Predictive Analytics
7) “Predict the Future” from the FSA-AMPS model includes which of the following types of
analytics?
A) Descriptive Analytics and Diagnostic Analytics
B) Prescriptive Analytics and Diagnostic Analytics
C) Prescriptive Analytics and Predictive Analytics
D) Diagnostic Analytics and Predictive Analytics
8) In which component of the AMPS model does sensitivity analysis fit?
A) Ask the Question
B) Master the Data
C) Perform the Analysis
D) Share the Story
9) Using a visualization to communicate the results of cash flow analysis is an example of
which component of the AMPS model?
A) Ask the Question
B) Master the Data
C) Perform the Analysis
D) Share the Story
10) What happens to Bank of America’s profits if the interest rates change in the future from
three to four percent? This question is an example of what type of analytics?
A) Descriptive analytics
B) Diagnostic analytics
C) Predictive analytics
D) Prescriptive analytics
2
,11) Determining the sensitivity of net income at a bank to potential changes in interest rates
would be an example of what type of analytics?
A) Prescriptive analytics
B) Descriptive analytics
C) Diagnostic analytics
D) Predictive analytics
12) Determining the intrinsic value of a stock based on forecasted financial performance and
uncertainty would be an example of what type of analytics?
A) Prescriptive analytics
B) Descriptive analytics
C) Diagnostic analytics
D) Predictive analytics
13) Forecasting sales and profits over the next ten years are examples of which of the following
analytics types?
A) Prescriptive analytics
B) Descriptive analytics
C) Diagnostic analytics
D) Predictive analytics
14) Which of the following is not one of the five forces?
A) Bargaining power of employees
B) Threat of new entrants
C) Bargaining power of buyers
D) Bargaining power of suppliers
15) If there are low legal barriers and a replicable business model, which of the following five
forces would be strong?
A) Threat of substitutes
B) Threat of new entrants
C) Bargaining power of buyers
D) Bargaining power of suppliers
3
, 16) If there are homogenous products and low switching costs, which of the following five forces
would be strong?
A) Threat of substitutes
B) Threat of new entrants
C) Bargaining power of buyers
D) Bargaining power of suppliers
17) If there is high supplier power (with respect to their five forces), which of the following
financial statement characteristics will be shown?
A) Higher accounts payable turnover ratios
B) Higher accounts receivable turnover ratios
C) Low long-term asset values
D) High inventory turnover ratios
18) If there is high buyer power (with respect to their five forces), which of the following
financial statement characteristics will be shown?
A) Lower accounts payable turnover ratios
B) Lower accounts receivable turnover ratios
C) Low long-term asset values
D) High inventory turnover ratios
19) Which of the following includes the collection of information that is relevant to the
company’s profitability and financial condition?
A) Data incorporation
B) Data reliability
C) Data identification
D) Data linking
20) Which of the following investigates the reason why past performance realizations are noted
in the financial statements?
A) Prescriptive analytics
B) Descriptive analytics
C) Diagnostic analytics
D) Predictive analytics
4
