| 1. | A technique that is used in comparative analysis of financial statement is |
| a. | graphical analysis |
| b. | preference analysis |
| c. | common size analysis |
| d. | returning analysis |
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Answer: (c).common size analysis
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| 2. | The net income available to stockholders is $125 and total assets are $1,096 then return on common equity would be |
| a. | 0.00114 |
| b. | 0.114 |
| c. | 0.12 times |
| d. | 0.12 |
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Answer: (b).0.114
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| 3. | The price per share is $30 and earnings per share is $3.5 then price for earnings ratio would be |
| a. | 8.57 times |
| b. | 0.0857 |
| c. | 0.11 times |
| d. | 0.11 |
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Answer: (a).8.57 times
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| 4. | The price per share is $25 and the cash flow per share is $6 then the price to cash flow ratio would be |
| a. | 0.24 times |
| b. | 4.16 times |
| c. | 0.0416 |
| d. | 0.24 |
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Answer: (b).4.16 times
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| 5. | The low price for earnings ratio is the result of |
| a. | low riskier firms |
| b. | high riskier firms |
| c. | low dividends paid |
| d. | high marginal rate |
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Answer: (a).low riskier firms
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