Fsa

Question 1

Installment method

Answer 1

Profit to sales ratio. Then multiply that ratio by down payment / cash received

Question 2

Cost recovery method

Answer 2

Nothing reported until initial cost is covered

Question 3

Weighted average cost method

Answer 3

Total spent on items ($155,000) divided by number of items bought (15,000 units) = 10.33
10.33 * number of units actually sold (12,000) = ($124,000)

Question 4

Weighted avg shares outstanding

Answer 4

Starting number of shares in year + (# of new shares * 1/2 July)
1,000,000 + (100,000 * 1/2) = 1,050,000
If repurchases then negative what’s in parenthesis

Eps would then be NET INCOME ONLY / avg weighted number of shares

Question 5

Eps and preferred dividend

Answer 5

Preferred dividend only takes from net income when calculating basic eps

Question 6

Unrealized gains and losses on Available for Sale ‘s effect on shareholders equity

Answer 6

Flow through to Retained Earnings

Question 7

Unrealized gains and losses on Held to Maturity ‘s effect on shareholders equity

Answer 7

Component of accumulated other comprehensive income

Question 8

Leverage ratio

Answer 8

Assets / Equity

Question 9

A ratio is an…

Answer 9

…indicator.

Question 10

Ratios are related. T or F

Answer 10

False. Ratios are INTERRELATED

Question 11

Computation equals Analysis. T or F

Answer 11

False. Computation does not mean analysis. You can find out how many apples Johnny has but you do not know why he has that many

Question 12

Retention ratio equation

Answer 12

Retained earnings / Net income

The other 75% of dividend payout ratio 25%

Question 13

Coverage ratios

Answer 13

Sub category of solvency ratios. Ability of company to cover its payments related to debt and leases

Question 14

DuPont analysis is the same as

Answer 14

ROE

Question 15

What is included in Net Revenue

Answer 15

Revenue for goods sold - Returns and allowances