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1)

Concord Limited reported the following on its income statement:

Profit before income taxes		$550000
Income tax expense		147000
Profit		$403000

An analysis of the income statement revealed that interest expense was $44000. Concords interest coverage ratio was

9.2 times.

13.5 times.

12.5 times.

10.2 times

2)

Dieter Incorporated has provided you with the following selected information from 2020 and 2021:

		2021		2020
Interest expense		$15,500		$10,700
Income tax expense		18,000		22,000
Profit		68,000		60,000
Total assets		523,000		497,000
Total liabilities		285,000		234,000

Which of the following best interprets Dieters debt to total assets ratio analysis?

Debt to total asset ratio has weakened compared to prior year, increasing from 47.1% to 54.5%.

Debt to total asset ratio has weakened compared to prior year, decreasing from 2.1 to 1.8.

Debt to total asset ratio has improved compared to prior year, increasing from 47.1% to 54.5%.

Debt to total asset ratio has improved compared to prior year, decreasing from 2.1 to 1.8.

3)

Fantastic Cleaning Products Ltd. has provided you with the following selected information from 2020 and 2021:

		2021		2020
Sales		$785,000		$740,000
Sales returns and allowances		55,200		52,000
Cost of goods sold		358,000		305,000
Profit		86,800		128,000

Using a vertical trend analysis with net sales as a base, which of the following most accurately depicts the information stated above?

Cost of goods sold as a percentage of net sales increased by 5 percentage points.

Profit as a percentage of net sales increased by 6.7 percentage points.

Profit as a percentage of net sales did not change significantly from 2020.

Cost of goods sold as a percentage of net sales remained consistent from 2020.

4)

Raji Upholstery Inc. reported revenue of $250,000 in 2021 and $222,500 in 2020. The horizontal percentage change from 2020 to 2021 is

12.4%.

112.4%.

111.0%.

11.0%.

5)

An intercompany comparative analysis is the process of

comparing an item or financial relationship within a company in the current year with one or more prior years.

comparing an item or financial relationship of one company with historical data compiled by one or more competing companies.

comparing an item or financial relationship of one company with the same item or relationship in one or more competing companies.

comparing an item or financial relationship within a company to the internally prepared master budget in order to highlight variances.

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