#1
What is the primary goal of financial analysis in managerial accounting?
To assess the financial health of a company
ExplanationAssessing financial health.
#2
Which financial statement presents the revenues and expenses of a company for a specific period?
Income Statement
ExplanationPeriodic revenue and expense report.
#3
In financial analysis, what does the term 'liquidity' refer to?
A company's ability to meet its short-term obligations
ExplanationShort-term debt payment capability.
#4
Which of the following financial ratios measures a company's ability to pay its short-term obligations with its most liquid assets?
Current Ratio
ExplanationShort-term liquidity measurement.
#5
Which method of financial statement analysis involves comparing a company's financial ratios to those of other companies in the same industry?
Ratio Analysis
ExplanationComparative analysis within industry.
#6
What does the 'gross profit margin' measure in financial analysis?
The percentage of revenue that exceeds the cost of goods sold
ExplanationProfitability after production costs.
#7
What does the term 'EBITDA' stand for in financial analysis?
Earnings Before Interest, Taxes, Depreciation, and Amortization
ExplanationOperating performance measure.
#8
What does the DuPont analysis method in financial analysis primarily focus on?
Evaluating a company's return on equity (ROE)
ExplanationROE decomposition for insights.