CHAPTER3
FinancialStatementAnalysis,Planning,andGrowth
MultipleChoiceQuestions:I.
DEFINITIONS
LONG-TERM
c
1.a.b.c.d.e.
PLANNING
Onekeyreasonalong-termfinancialplanisdevelopedisbecause:theplandeterminesyourfinancialpolicy.theplandeterminesyourinvestmentpolicy.
therearedirectconnectionsbetweenachievablecorporategrowthandthefinancialpolicy.
thereisunlimitedgrowthpossibleinawell-developedfinancialplan.Noneoftheabove.
PROFORMASTATEMENTSb2.Projectedfuturefinancialstatementsarecalled:
a.plugstatements.
b.proformastatements.c.reconciledstatements.d.aggregatedstatements.e.noneoftheabove.
PERCENTAGEOFSALESe3.Thepercentageofsalesmethod:
a.requiresthatallaccountsgrowatthesamerate.
b.separatesaccountsthatvarywithsalesandthosethatdonotvarywithsales.c.allowstheanalysttocalculatehowmuchfinancingthefirmwillneedtosupportthe
predictedsaleslevel.d.BothAandB.e.BothBandC.COMMON-SIZESTATEMENTSe4.A_____standardizesitemsontheincomestatementandbalancesheetasapercentage
oftotalsalesandtotalassets,respectively.a.taxreconciliationstatementb.statementofstandardizationc.statementofcashflows
d.common-baseyearstatemente.common-sizestatementFINANCIALRATIOSa5.Relationshipsdeterminedfromafirm
purposesareknownas:a.financialratios.
b.comparisonstatements.c.dimensionalanalysis.d.scenarioanalysis.e.solvencyanalysis.
’sfinancialinformationandusedforcomparison