ETS Exam Review Questions & Answers 2024/2025
Gross Profit - ANSWERS=Revenue - COGS
T/F: A share represents a percentage of the company - ANSWERSFalse
Market Capitalztion - ANSWERSHow much an asset is worth according to the market
Earnings per Share (EPS) - ANSWERSNet Income/Number of...
T/F: A share represents a percentage of the company - ANSWERSFalse
Market Capitalztion - ANSWERSHow much an asset is worth according to the market
Earnings per Share (EPS) - ANSWERSNet Income/Number of Shares
Book Value per Share - ANSWERSEquity/Number of Shares
Book Value - ANSWERSHow much assets are worth without liabilities
The income statement tells what happens between which statements? - ANSWERSBalance Sheet
A stock/share is a ____ of a company. - ANSWERSFraction
Market Value - ANSWERSPrice per Share x Number of Shares
What are the three major financial statements? - ANSWERSIncome Statement, Balance Sheet, &
Statement of Cash Flows
T/F: The period of an income statement is always a year. - ANSWERSFalse
Price to Earnings Ratio (P/E) - ANSWERSPrice per Share/Earnings per Share
, Earnings per share can be used to determine market value by - ANSWERSmultiplying the total earnings
by the number of shares
T/F: P/E ratios are usually used to compare companies with one another. - ANSWERSTrue
It is important to consider various types of earnings including which of the following? - ANSWERSFuture
Earnings
T/F:Depreciation is only used for non-durable assets. - ANSWERSFalse
T/F: Depreciation is typically used to spread out the cost of an asset through its useable life. -
ANSWERSTrue
When depreciating an asset, the value declines on which financial statement? - ANSWERSBalance Sheet
ROA - ANSWERSReturn on Assets = Net Income/Total Assets
-Used to determine how effectively assets are used; higher number better
T/F: It is not important to consider what type of income you are using to determine ROA. -
ANSWERSFalse
(ROA): When comparing two companies with one another it is important to: - ANSWERSuse the same
operating revenue
EBT/EBIT is usually referred to as: - ANSWERSIncome before taxes
T/F:Non-operating income needs to be removed to determine ROA. - ANSWERSTure if you are interested
in determining how well a company manages its operating assets
T/F: The end result of amortization and depreciation are essentially the same on a financial statement -
ANSWERSTrue
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