13.Profitabilityratiosshowthe combinedeffectsofliquidity,assetmanagement,anddebtmanagementonoperations. a.True b.False True ANSWER: Easy DIFFICULTY: Profitabilityratios TOPICS: 14.Determiningwhethera firm'sfinancialpositionisimprovingordeterioratingrequiresanalysisofmorethanoneset of financialstatements.Trendanalysisis onemethodofmeasuringafirm'sperformanceovertime. a.True True ANSWER: Easy DIFFICULTY: Trendanalysis TOPICS: 15.Theinformationcontainedintheannualreportisusedby investorstoformexpectationsaboutfutureearningsand dividends. a.True b.False True ANSWER: Easy DIFFICULTY: Annualreport TOPICS: 16.Thebalancesheetpresentsasummaryofthefirm'srevenuesandexpensesoveranaccountingperiod. a.True b.False False ANSWER: Easy DIFFICULTY: Financialstatements TOPICS: 17.On the balancesheet,totalassetsmustequaltotalliabilitiesplusstockholdersequity. a.True b.False True ANSWER: Easy DIFFICULTY: Balancesheet TOPICS: 18.Oneofthebiggestnoncashitemsontheincomestatementis depreciationwhichneedsto besubtractedfromnet incometo determinecashflowsforthefirm. a.True b.False False ANSWER: Easy DIFFICULTY:
13.Profitabilityratiosshowthe combinedeffectsofliquidity,assetmanagement,anddebtmanagementonoperations. a.True b.False ANSWER: True DIFFICULTY: Easy TOPICS: Profitabilityratios 14.Determiningwhethera firm'sfinancialpositionisimprovingordeterioratingrequiresanalysisofmorethanoneset of financialstatements.Trendanalysisis onemethodofmeasuringafirm'sperformanceovertime. a.True ANSWER: True DIFFICULTY: Easy TOPICS: Trendanalysis 15.Theinformationcontainedintheannualreportisusedby investorstoformexpectationsaboutfutureearningsand dividends. a.True b.False ANSWER: True DIFFICULTY: Easy TOPICS: Annualreport 16.Thebalancesheetpresentsasummaryofthefirm'srevenuesandexpensesoveranaccountingperiod. a.True b.False ANSWER: False DIFFICULTY: Easy TOPICS: Financialstatements 17.On the balancesheet,totalassetsmustequaltotalliabilitiesplusstockholdersequity. a.True b.False ANSWER: True DIFFICULTY: Easy TOPICS: Balancesheet 18.Oneofthebiggestnoncashitemsontheincomestatementis depreciationwhichneedsto besubtractedfromnet incometo determinecashflowsforthefirm. a.True b.False ANSWER: False DIFFICULTY: Easy