46、Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.
An analyst prepared common-size balance sheets for two companies operating in the same industry. The analyst           noted that both companies had the same proportion of current liabilities, long-term liabilities, and shareholders' equity, and the following ratios:

The most reasonable conclusion is that, compared with Company 2, Company 1 had a:

Select exactly 1 answer(s) from the following:

A. higher percentage of assets associated with inventory.

B. higher percentage of assets associated with accounts receivable.

C. lower percentage of assets associated with marketable securities.

D. higher percentage of assets associated with marketable securities.

47、Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.
An analyst gathered the following information for a company:

All other factors being equal, which of the following is the best conclusion with respect to the information above? From 2003 to 2005, the company's:

Select exactly 1 answer(s) from the following:

A. fixed asset turnover increased.

B. credit policies became more strict.

C. cash conversion cycle became shorter.

D. average inventory processing time decreased.

48、Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.

If a company has a current ratio of 2.0, that company's repayment of $150,000 in short-term borrowing obtained from a bank would most likely decrease:

Select exactly 1 answer(s) from the following:

A. the company's current ratio, but not the company's cash flow from operations.

B. the company's cash flow from operations, but not the company's current ratio.

C. both the company's current ratio and the company's cash flow from operations.

D. neither the company's current ratio nor the company's cash flow from operations.

49、Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.

At the end of the year, a company sold equipment for $30,000 cash. The company paid $110,000 for the equipment several years ago and had accumulated depreciation of $70,000 for the equipment at the time of sale. All else equal, the equipment sale will result in the company's cash flow from:

Select exactly 1 answer(s) from the following:

A. investing activities decreasing by $10,000.

B. investing activities increasing by $30,000.

C. operating activities being $10,000 less than net income.

D. operating activities being $30,000 more than net income.

50、Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.

In 2007, a company reported net income of $130 million and cash flow from operations of $120 million. All else equal, the most likely explanation for the difference between net income and cash flow from operations in 2007 is that the company:

Select exactly 1 answer(s) from the following:

A. tightened credit policies and increased collection efforts during the year.

B. purchased new property, plant, and equipment at the beginning of the year.

C. sold a long-term investment for an amount equal to book value at the end of the year.

D. increased raw materials inventory in anticipation of increased sales at the end of the year.     

答案和详解如下：

46 Correct answer is B

“Financial Analysis Techniques,” Thomas R. Robinson, Hennie van Greuning, Elaine Henry, and Michael A. Broihahn
2008 Modular Level I, Vol. 3, pp. 574-575, 590-592
“Working Capital Management,” Edgar A. Norton, Jr., Kenneth L. Parkinson, and Pamela p. Peterson
2008 Modular Level I, Vol. 4, pp. 89-90
Study Session 10-41-a, d, 11-46-a
evaluate and compare companies using ratio analysis, common-size financial statements, and charts in financial analysis;
calculate and interpret activity, liquidity, solvency, profitability, and valuation ratios;
calculate and interpret liquidity measures using selected financial ratios for a company and compare it with peer companies
The current ratio includes inventory but the quick ratio does not. (Current ratio is higher than quick ratio and quick ratio is higher than cash ratio.) The quick ratio includes accounts receivable but the cash ratio does not. The denominator for all three ratios is current liabilities, which are the same proportion for both companies. The difference in ratios is therefore created by inventory and accounts receivable. Company 1 has the higher percentage of inventory because the difference between the current ratio and quick ratio is greater for that company. Company 2 had the higher percentage of accounts receivable because the difference between the quick ratio and the cash ratio is greater for Company 2.

47 Correct answer is A

“Financial Analysis Techniques,” Thomas R. Robinson, Hennie van Greuning, Elaine Henry, and Michael A. Broihahn
2008 Modular Level I, Vol. 3, pp. 583-590
“Working Capital Management,” Edgar A. Norton, Jr., Kenneth L. Parkinson, and Pamela p. Peterson
2008 Modular Level I, Vol. 4, pp. 89-90
Study Sessions 10-41-d, 11-46-a
calculate and interpret activity, liquidity, solvency, profitability, and valuation ratios;
calculate and interpret liquidity measures using selected financial ratios for a company and compare it with peer companies
Total asset turnover increased over the period, but turnovers related to the cash conversion cycle decreased or remained relatively stable. The fixed asset turnover had to have increased to offset the decline in inventory and accounts receivable turnovers.

48 Correct answer is D

“Understanding the Cash Flow Statement,” Thomas R. Robinson, Hennie van Greuning, Elaine Henry, and Michael A. Broihahn
2008 Modular Level I, Vol. 3, pp. 251-252
“Financial Analysis Techniques,” Thomas R. Robinson, Hennie van Greuning, Elaine Henry, and Michael A. Broihahn
2008 Modular Level I, Vol. 3, p. 591
Study Sessions 8-34-a, 10-41-d
compare and contrast cash flows from operating, investing, and financing activities, and classify cash flow items as relating to one of these three categories, given a description of the items;
calculate and interpret activity, liquidity, solvency, profitability, and valuation ratios
The current ratio is above 1.0, so the payment of short-term borrowing would increase the current ratio; it would reduce both the numerator and denominator by the same amount. The repayment of short-term debt would reduce cash flow from financing, not cash flow from operations.

49 Correct answer is B

“Understanding the Cash Flow Statement,” Thomas R. Robinson, Hennie van Greuning, Elaine Henry, and Michael A. Broihahn
2008 Modular Level I, Vol. 3, pp. 251-252, 271-272, 275-276
Study Session 8-34-a, f
compare and contrast cash flows from operating, investing, and financing activities, and classify cash flow items as relating to one of these three categories, given a description of the items;
demonstrate the steps in the preparation of direct and indirect cash flow statements, including how cash flows can be computed using income statement and balance sheet data
The book value of the equipment would have been $110,000 - $70,000 = $40,000 at the time of sale, so a loss of $10,000 for financial statement purposes would be realized. The net loss would reduce net income and would be adjusted in the statement of cash flows by adding the net loss to net income. The total amount of the proceeds ($30,000) would be shown as a cash inflow from investing activities.

50 Correct answer is D

“Understanding the Cash Flow Statement,” Thomas R. Robinson, Hennie van Greuning, Elaine Henry, and Michael A. Broihahn
2008 Modular Level I, Vol. 3, pp. 267-271, 276-277
Study Session 8-34-h
analyze and interpret a cash flow statement using both total currency amounts and common-size cash flow statements
The increase in inventory (working capital investment) would reduce cash flow from operations relative to net income.

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谢谢，非常好