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Securities > Accounting Analysis > Flashcards

Accounting Analysis Flashcards

1
Q

Which of the below would NOT be on an income statement?

A

Trade payables

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2
Q

Which of the following is the key difference between the current ratio and the quick ratio?

A

Inventory

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3
Q

Which of the following is NOT part of shareholders’ funds?

A

Investments in associates

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4
Q

The best definition of enterprise cash flow would be:

A

Cash flow to all providers of finance

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5
Q

What would you not expect to find under tangible non-current assets?

A

Work-in-progress

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6
Q

Which of the following would NOT be found in an income statement?

A

Deferred tax liability

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7
Q

Which of the following has taken into consideration the repayment of debentures?

A

Equity cash flow

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8
Q

Which of the following would not be included within shareholders funds?

A

Warrants

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9
Q

Which of the following is not part of shareholders’ funds?

A

Authorised share capital

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10
Q

What would you not expect to find under tangible non-current assets?

A

Work-in-progress

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11
Q

What is the effect of ‘capitalisation’ of expenditure on the statement of financial position?

A

Cash decreases and non-current assets increase

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12
Q

Return on capital employed

A

Return on capital employed = profit before interest and tax / capital employed.

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13
Q

Which of the following would appear on a cash flow statement?

A

Acquisitions and disposals

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14
Q

Return on equity

A

ROE = Profit to ordinary shareholders / shareholder funds

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15
Q

Where on a company’s statement of financial position would you find the share premium account?

A

Capital and reserves

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16
Q

On the statement of financial position, which one below would not appear as intangible non current assets?

A

Revaluation reserve

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17
Q

The gross profit margin will take into account which of the following?

A

Only the cost of goods

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18
Q

The company has produced its financial statements and have enclosed additional disclosures in the notes. Which of the following will LEAST likely appear in these notes?

A

The statement of investment principles

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19
Q

Which would you NOT find as a current liability in a statement of financial position?

A

Interest paid

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20
Q

Which one of the following would be classified as capital expenditure?

A

The purchase of computers for new work premises

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21
Q

Where in the financial statements would you find tax payable?

A

Statement of financial position

22
Q

When would a company disclose a minority interest in the statement of financial position?

A

A subsidiary company is not fully owned by the group

23
Q

Any increase in inventory

A

deduct from trading profit, the decrease in receivables: add to trading profit and the Increase in payables: add to trading profit.

24
Q

Which of the following would usually be found under non-current assets in a statement of financial position?

A

Computers

Land and buildings

25
Q

All of the following are intangible non-current assets except:

A

Share premium

26
Q

The current ratio is typically used to measure which one of the following within a company?

A

Liquidity

27
Q

All of the following are current assets except:

A

Payables

28
Q

In a statement of financial position (balance sheet), prepayments come under which category?

A

Current assets

29
Q

Which of the following items would be found in a cash flow statement?

A

Equity dividends paid

30
Q

What is net asset value per ordinary share?

A

(Assets - liabilities) / number of ordinary shares

31
Q

Which of the following will increase the shareholder’s funds of a company?

A

Rights issue

Offer for subscription

32
Q

The role of the auditor includes:

A

To report whether the accounts have been properly prepared in accordance with the accounting policies

33
Q

Which of the following would best describe enterprise cash flow?

A

Free cash flow before considering any financing costs

34
Q

Which of the following does NOT appear in the cash flow statement?

A

Net assets

35
Q

Which of the following is not a heading in the cash flow statement?

A

Dividends paid and proposed

36
Q

All of the following are current assets, except:

A

Provisions

37
Q

Which of the following items does not appear in the cash flow statement?

A

Deferred taxation

38
Q

In which of the following financial statements would you find proceeds on issue of bonds and equities?

A

Cash flow statement

39
Q

Which of these is shown on the income statement?

A

Interest

40
Q

The share premium account could be used in which one of the following situations?

A

A company does a capitalisation issue

41
Q

Which of the following best describes a minority interest/non-controlling interest in the context of a consolidated income statement?

A

Profits due to outside shareholders in subsidiaries

42
Q

Which of the following would you see on a cash flow statement?

A

Equity dividends paid

43
Q

Which of the following best describes the quick ratio (acid test)?

A

Receivables + cash / payables + short-term borrowings

44
Q

Which of the following is not a non-current asset?

A

Inventory held in the company warehouse

45
Q

When calculating earning per share (EPS), which of the following would not be removed from the operating profits of a company?

A

Ordinary share dividends

46
Q

A company has completed a 1:5 stock-split. Following the stock-split the most likely impact on the company’s Debt to equity ratio will be:

A

It will remain unchanged

47
Q

A dividend can be paid with which of the following:

A

Profit and loss reserve

48
Q

The accounting equation can be described as

A

Assets = capital + reserves + liabilities

49
Q

Turnover less cost of sales less distribution costs less administration expenses equals:

A

Operating profit

50
Q

Which of the following statements does not apply to cash flow statements?

A

They show how much profit was earned during the year

Securities (19 decks)

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