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FIN 686 Exam I Questions and Complete Solutions Graded A+
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FIN 686 Exam I Questions and Complete Solutions Graded A+
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FIN 686 Exam IQuestions and
Complete Solutions
Graded A+
Denning [Date] [Course title]
, Which of the following is least likely to be considered a role of financial statement analysis?
1. Assessing the management skill of the company's executives.
2. To make economic decisions.
3. Determining whether to invest in the company's securities. - Answer: Assessing the management
skill of the company's executives.
An analyst who wants to examine a firm's financing transactions during the most recent period is most
likely to evaluate the firm's statement of - Answer: Cash flows
Reading the footnotes to a company's financial statements and the Management Discussion and
Analysis is least likely to help an analyst determine
1. how well the financial statements reflect the company's true performance.
2. the various accruals, adjustments and assumptions that went into the financial statements.
3. the detailed information that underlies the company's accounting system. - Answer: the detailed
information that underlies the company's accounting system.
Alpha company reported the following financial statement information
December 31, 2006:
Assets $70,000
Liabilities $45,000
December 31, 2007:
Assets $82,000
Liabilities $55,000
During 2007:
Stockholder investments $3,000
Net income ?
Dividends $6,000
Calculate Alpha's net income for the year ended December 31, 2007 and the change in stockholders'
equity for the year ended December 31, 2007. - Answer: $5,000 and $2,000 increase
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