Homework Answers
Option (a) is correct
Operating expense percentage often used as a benchmark indicator, when comparing a company's financial performance as to that of its peers.When the financial performance is compared then the company that has lower operating expense percentage is considered as better.
Option (b) is incorrect as when the impact of macro economic trends on the company's balance sheet is assessed, then all the balance sheet accounts involved are analyzed, not only the income or expense accounts.
Option (c) is incorrect as operating expense is not the only criteria to compare the pricing strategies.
Option (d) is incorrect as management integrity is not solely measured by operating expense.
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QUESTION 6 1. when is operating expense percentage often used as a benchmark indicator? a. When...
QUESTION 13 1. Why is it important to compare a business's operating expense percentage to industry...
QUESTION 13 1. Why is it important to compare a business's operating expense percentage to industry benchmarks 1. It helps management do a better job of collecting receivables II. It helps determine the business's financial risk III. It reflects how well the business is managing its expenses compared to its peers. IV. It provides important insight into management integrity a. I and II only. b. I and III only. c. II and III only. d. III and IV only
QUESTION 12 1. From among the following choices, identify those which are correct about operating expense...
QUESTION 12 1. From among the following choices, identify those which are correct about operating expense percentage 1. It is a financial indicator over which management can exert significant control over the longer term. II. As management's control over operating expenses improves, business's operating expense percentage declines and cash flow improves. III. It is a financial indicator that is unaffected by changes in the competitive environment 1. It is a risk (cash) driver over which management typically has little innuence....
QUESTION 4 a business's gross margin is less than its operating expense percentage, what will be...
QUESTION 4 a business's gross margin is less than its operating expense percentage, what will be the likely impact a. The net profit margin will likely be negative. b. The net profit margin will likely be positive. c. Income taxes will likely be owed for the period in question. d. Operating profit will likely be positive.
QUESTION 16 A company has high operating leverage when: A small percentage changes in revenue produce...
QUESTION 16 A company has high operating leverage when: A small percentage changes in revenue produce large percentage changes in profit. OB. a company utilizes debt to finance its assets. OC. the organization makes purchases on credit instead of paying cash. O D.management buys enough of the company's shares of stock to take control of the corporation. QUESTION 17 Select the incorrect statement regarding upstream and downstream costs. OA. Upstream and downstream costs are reported as product costs on the...
1. QUESTION 10 In which analytical area does the level of and movement in the operating...
1. QUESTION 10 In which analytical area does the level of and movement in the operating expense percentage mit greatest impact a. Management risk b. Financial risk c. Market (industry and business) risk. d. Accounting risk.
the dropdown option for the first question: net profit margin OR operating profit margin // debt...
the
dropdown option for the first question: net profit margin OR
operating profit margin // debt ratio OR equity multiplier.
the dropdown option for the second question: shareholder and
dividend management OR use of debt versus equity financing //
management of its revenues and depreciation methods OR control over
its expenses
9. An analysis of company performance using DuPont analysis A sheaf of papers in his hand, your friend and colleague, Jason, steps into your office and asked the following...
3. Which of the following is not a potential problem when developing a trend analysis based upon ...
3. Which of the following is not a potential problem when developing a trend analysis based upon percentage changes from year-to-year? Question 3 options: 1) The lack of reference to a base dollar amount in order to make valid inferences on the relative magnitude of the changes. 2) A negative amount in Year 2 of a balance sheet item and a positive amount in Year 3. 3) Comparing yearly amounts with an average computed over all years to highlight unusual...
Question 1 When organisations sell various goods to customers there is often some uncertainty abo...
Question 1 When organisations sell various goods to customers there is often some uncertainty about the ultimate collectability of the transaction price. Should sales revenue be reduced to take into account the probability that a certain percentage of the sales revenue will never be collected? Question 2 If an entity is performing its responsibilities under a contract to a customer in a manner where the performance obligations are being satisfied 'over time' (rather than at a 'point in time), then...
Multiple Choice Question 113 Blue Spruce Corp. uses the percentage-of-receivables method for recording bad debt expense....
Multiple Choice Question 113 Blue Spruce Corp. uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $400000 and credit sales are $1600000. Management estimates that 6 % of accounts receivable will be uncollectible. What adjusting entry will Blue Spruce Corp. make if the Allowance for Doubtful Accounts has a credit balance of $4000 before adjustment? Bad Debt Expense 16000 Accounts Receivable 16000 Bad Debt Expense 20000 Allowance for Doubtful Accounts 20000 Bad Debt Expense 8000...
Question: Question:1. When the percentage-of-completion method of accounting for long-term contracts, the percentage of completion used to...
Question: Question:1. When the percentage-of-completion method of accounting for long-term contracts, the percentage of completion used to recognize gross profit in the first year usually is determined by measuring: a. costs incurred in the first year, divided by estimated remaining costs to complete the project. b. costs incurred in the first year, divided by estimated total cost of the completed project. c. costs incurred in the first year, divided by estimated gross profit. d. none of the above. 2.As of...
QUESTION 13 1. Why is it important to compare a business's operating expense percentage to industry benchmarks 1. It helps management do a better job of collecting receivables II. It helps determine the business's financial risk III. It reflects how well the business is managing its expenses compared to its peers. IV. It provides important insight into management integrity a. I and II only. b. I and III only. c. II and III only. d. III and IV only
QUESTION 12 1. From among the following choices, identify those which are correct about operating expense percentage 1. It is a financial indicator over which management can exert significant control over the longer term. II. As management's control over operating expenses improves, business's operating expense percentage declines and cash flow improves. III. It is a financial indicator that is unaffected by changes in the competitive environment 1. It is a risk (cash) driver over which management typically has little innuence....
QUESTION 4 a business's gross margin is less than its operating expense percentage, what will be the likely impact a. The net profit margin will likely be negative. b. The net profit margin will likely be positive. c. Income taxes will likely be owed for the period in question. d. Operating profit will likely be positive.
QUESTION 16 A company has high operating leverage when: A small percentage changes in revenue produce large percentage changes in profit. OB. a company utilizes debt to finance its assets. OC. the organization makes purchases on credit instead of paying cash. O D.management buys enough of the company's shares of stock to take control of the corporation. QUESTION 17 Select the incorrect statement regarding upstream and downstream costs. OA. Upstream and downstream costs are reported as product costs on the...
1. QUESTION 10 In which analytical area does the level of and movement in the operating expense percentage mit greatest impact a. Management risk b. Financial risk c. Market (industry and business) risk. d. Accounting risk.
the
dropdown option for the first question: net profit margin OR
operating profit margin // debt ratio OR equity multiplier.
the dropdown option for the second question: shareholder and
dividend management OR use of debt versus equity financing //
management of its revenues and depreciation methods OR control over
its expenses
9. An analysis of company performance using DuPont analysis A sheaf of papers in his hand, your friend and colleague, Jason, steps into your office and asked the following...
Question 1 When organisations sell various goods to customers there is often some uncertainty about the ultimate collectability of the transaction price. Should sales revenue be reduced to take into account the probability that a certain percentage of the sales revenue will never be collected? Question 2 If an entity is performing its responsibilities under a contract to a customer in a manner where the performance obligations are being satisfied 'over time' (rather than at a 'point in time), then...
Multiple Choice Question 113 Blue Spruce Corp. uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $400000 and credit sales are $1600000. Management estimates that 6 % of accounts receivable will be uncollectible. What adjusting entry will Blue Spruce Corp. make if the Allowance for Doubtful Accounts has a credit balance of $4000 before adjustment? Bad Debt Expense 16000 Accounts Receivable 16000 Bad Debt Expense 20000 Allowance for Doubtful Accounts 20000 Bad Debt Expense 8000...
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