This was a review for my financial statement analysis class. I didnt know the an

Question

This was a review for my financial statement analysis class. I didnt know the answer for questions 30, 31, but for the rest I choose: 32. A 33. D Which of the following can be said regarding the financial statements? jee question 29) has positive equity and generates net income ventures (Marco's) impact on DelGrosso's urn on assets and Profit Margin are disproportiona turn on assets and profit disproportion turn on assets was low low because of the IV. margin are disproportionately high because of the JV portionately low but profit margin was disproportionately high. onately high but profit margin was disproportionately low. C. Re -31) ABC, CAH and MCK all make regard to the use of operating leases? se of operating leases. Which of the following is true with operating A. the companies a 8. the companies are intentionally C. the conversion of operating actually are? m capital leases trying to mislead readers of their financial statements ases to capital leases will increase the return on assets ses to capital leases will have no impact on return on equity. -32) Treasury stock is to equity as: A. accumulated depreciation is to total assets B. long-term debt is to total liabilities C. net income is to retained earnings D. retained earnings is to equity. 33) Which of the following increases financial leverage without reducing financial flexibility A the repayment of bank debt B. the purchase of treasury stock C. the payment of cash dividends D. the issuance of common stock to fund the acquisition of a business

Explanation / Answer

30) Option D is correct because , due to JV - Net income will increase which is directly proportional to Return on Assets ( Net income / Assets), where as profit margin docreases as the formula is (PAT / Sales) , which means that net income icreases from top line sales, so this will disproportionately decreased

31) Option B is true because, Operating lease is a off balance sheet item and this should be actually considered to be as debt which misleads investors to overlook and cant understand their financial statments

32) Option D fits in more, because treasury stock is a liability and it should be a combination of (Debit / Debit ) type accounting, among all options retained earning to equity are more closer in accounting terminology.

Though Long term debt / Liabilities as a debit / debit type, it doesnt hold true because debt has no more link to do with treasury stock

33) Option D is correct. Good understanding

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.