Evaluate a pro forma financial statement


Question 1. Which of the following compliance issues affects users and producers of financial statements, including pro forma financial statements?

a. editing requirements
b. auditing and legal requirements
c. ethical obligations
d. timeliness of implementation
e. responsibility for performance

Question 2. Which of the following is not a way to evaluate a pro forma financial statement?

a. percentage change/growth analysis

b. common size financial statements

c. financial ratios

d. internal rate of return

e. none of the above

Question 3. Which of the following ratios is calculated by dividing the cost of sales by accounts payable?

a. quick ratio

b. payables turnover ratio

c. retention ratio

d. dividend payout ratio

Question 4. Economic value added® is a financial performance measure that compares after tax operating earnings with a firm's cost of capital to determine a theoretical measure of the amount of economic value that has accrued to the shareholders over the same accounting period.

True

False

Question 5. DuPont analysis is a method of arranging financial ratios to decompose return on equity.

True

False

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Finance Basics: Evaluate a pro forma financial statement
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