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US CMA Part 2 Using Financial Information and Accounting — practice questions — page 3

Explore 82 free Using Financial Information and Accounting questions in US CMA Part 2 Financial Management. Open each question or exercise to read its content, reference answers and available explanation.

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Using Financial Information and Accounting questions and exercises with answers

Showing questions 61–82 of 82.

About what share of small and medium-sized companies use cloud-based accounting software?Read the answer and worked solution →What does a financial ratio state?Read the answer and worked solution →Over what stretch of time are a firm's ratios typically compared?Read the answer and worked solution →What is the honest limit of what ratio analysis can tell a manager?Read the answer and worked solution →Ratios are classified by what they measure. Which set names those four classes?Read the answer and worked solution →What do liquidity ratios measure?Read the answer and worked solution →What are the three main measures of liquidity?Read the answer and worked solution →How is the current ratio calculated?Read the answer and worked solution →Traditionally, what current ratio has been considered good?Read the answer and worked solution →A bakery has total current assets of $83,200 and total current liabilities of $60,150. What is its current ratio?Read the answer and worked solution →How does the acid-test ratio differ from the current ratio?Read the answer and worked solution →A bakery has total current assets of $83,200 and total current liabilities of $60,150. What is its net working capital?Read the answer and worked solution →Which three ratios are the main profitability ratios?Read the answer and worked solution →A bakery earned a net profit of $32,175 on net sales of $270,500. What is its net profit margin?Read the answer and worked solution →Return on equity measures what?Read the answer and worked solution →A bakery earned a net profit of $32,175 and reports total owners' equity of $78,750. What is its return on equity?Read the answer and worked solution →Earnings per share tells an investor what?Read the answer and worked solution →A bakery earned a net profit of $32,175 and has 10,000 shares of common stock outstanding. What are its earnings per share?Read the answer and worked solution →What do activity ratios reflect?Read the answer and worked solution →How is the inventory turnover ratio calculated?Read the answer and worked solution →Cost of goods sold was $112,500, beginning inventory was $18,000 and ending inventory was $15,000. What is the inventory turnover ratio?Read the answer and worked solution →A bakery reports total liabilities of $70,150 and owners' equity of $78,750. What is its debt-to-equity ratio?Read the answer and worked solution →

Worked practice questions

About what share of small and medium-sized companies use cloud-based accounting software?

  1. More than 30 percent
  2. More than 50 percent
  3. More than 70 percent
  4. More than 90 percent
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Correct answer: D. More than 90 percent

1. More than 90 percent of small and medium-sized companies use cloud-based accounting software. 2. It helps them synthesize the information they collect for their many financial statements. 3. That near-universal adoption is what lets accountants shift their focus toward advising clients rather than inputting data. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.8 Trends in Accounting_

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What does a financial ratio state?

  1. The relationship between financial data on a percentage basis
  2. The market value of the assets a firm owns today
  3. The total amount of cash a firm collected in a year
  4. The order in which a firm lists its liabilities
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Correct answer: A. The relationship between financial data on a percentage basis

1. Ratio analysis calculates and interprets financial ratios using data taken from the firm's financial statements. 2. A financial ratio states the relationship between financial data on a percentage basis. 3. Current assets might be viewed relative to current liabilities, or sales relative to assets. 4. The purpose is to assess condition and performance, which no single raw total on a statement can do alone. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.7 Analyzing Financial Statements_

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Over what stretch of time are a firm's ratios typically compared?

  1. Typically one to two years
  2. Typically three to five years
  3. Typically six to eight years
  4. Typically ten to twelve years
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Correct answer: B. Typically three to five years

1. A single ratio means little on its own, so it needs a basis for comparison. 2. Ratios are compared over time, typically across three to five years. 3. They can also be compared to industry averages or to another company in the same industry. 4. Period-to-period and industry comparisons are what let anyone answer whether a particular ratio is good or bad. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.7 Analyzing Financial Statements_

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More Financial Management topics

Financial Management and Securities Markets