A firm's market-to-book ratio might be greater than 1.0 due to accounting reasons. An example of an accounting reason that would cause the market-to-book ratio to increase is   a. straight-line methods of depreciation.     b. using LIFO versus FIFO for inventory.     c. level 1 fair values.     d. off-balance-sheet assets arising from investments in successful research and development programs that are expensed according to conservative accounting principles.

Q: Which of the following statements is CORRECT? O The more depreciation a firm reports, the higher its…

A: Depreciation means reduction in value of fixed assets over the period of time. It is for normal wear…

Q: Which of the statements is Not True about the Financial Expenses Coverage Ratio? a)     Its general…

A: Financial Expense Coverage Ratio - It another word we can also known as interest coverage ratio. It…

Q: Inadequacies of the existing system of financial ratio signify a need for a different approach to…

A: Financial ratios helps in the interpretation of any company’s finances’ raw data and get inputs on…

Q: In comparing the current ratios of two companies, why is it invalid to assume that the company with…

A: Solution: Current ratio is calculated as = Current assets / Current liabilities Current assets…

Q: which of the following statements is false? O When a buyer values a target firm, the appropriate…

A: Going concern value is a value that expects that the organization will remain permanently in the…

Q: Which of the following would be an example of conservative accounting? a. Recording an increase in…

A: According to conservative Accounting principle all anticipated losses should be recorded in the…

Q: Which of the following limitation in using ratio analysis best describes the following statement:…

A: Ratio analysis are used to determine the profitability of business using various ratios and…

Q: Which of the following statements is NOT correct? Statement 1: Debt utilization ratios are used to…

A: Statement 1: Debt utilization ratios measure a company's debt status in relation towards the total…

Q: 1. which of the following transactions and events would result in a deterioration in EBIT Profit…

A: Solution Note : Dear student as per the Q&A guideline we are required to answer the first…

Q: A company has been using the fair-value method to account for its investment. The company now has…

A: A company is using fair value method to account for its investment. Now due to exercise of…

Q: Which of the following pairs of financial statement analysis tool will be given more emphasis by a…

A: Solution:- Granting trade credit or selling on account to a new client are short term decisions and…

Q: 1. Which one of the following is not a characteristic generally evaluated in analyzing financial…

A: 1. Correct option is D i.e. Marketability Because financial statements can be used to analyses the…

Q: Which of the following statements is correct? Statement 1. Asset utilization ratios describe how…

A: Assets can be defined as the objects which are held by a firm for the purpose of generating future…

Q: Which of the following statements is most correct?(a) Working capital measures the company's ability…

A: A high working capital ratio is a sign that the corporation is not capitalizing their surplus cash…

Q: Which of the following statements is not correct? Group of answer choices A)Purchasing fixed assets…

A: A)Purchasing fixed assets using cash decreases the current ratio. Purchasing fixed asset using cash…

Q: Lincoln Industries' current ratio is 0.5. Considered alone, which of the following actions would…

A: The currant ratio is a short term liquidity measure ratio which can be calculated as follows Currant…

Q: Under what situation will return on equity be higher than return on investment? a. When assets…

A: (a) When assets exceed liabilities:Suppose assets is $ 70,000 and liabilities is $ 50,000 and net…

Q: The book value is derived by subtracting the total liabilities of a company from its total assets.…

A: 1. Book Value is the difference between a company's total assets and its total liabilities.…

Q: rn on total assets can improve its return on equity, all else remaining the same, but   A.…

A: Return on Equity (ROE) evaluates asset management, cost management, and debt management, a company…

Q: Compared with firms that expense costs, firms that capitalize costs can be expected to report:…

A: Firms may choose to either expense their costs or capitalize them. Each of these methods has a…

Q: Which of the following statements is CORRECT?  A. Net working capital is defined as current assets…

A: The question is multiple choice question. Gross Working Capital is the amount invested in Current…

Q: r, yet the current ratio at the end of the year is lower that at the beginning of the year.

A: Current ratio In financial accounting, current ratio is an example of liquidity ratio and current…

Q: Why is the acid test ratio a more rigorous test of short-term solvency than the current ratio? A.…

A: The ratio refers to the establishment of a relation between the two numbers. In accounting, the…

Q: Which one of the following is an advantage of LIFO? a. In periods of rising prices, less income…

A: >> LIFO Method means Last in first out i.e latest purchase is sold first. >> In rising…

Q: _are decreases in economic benefits during the accounting period in the form of outflows or…

A: The right answer is option b. Expenses

Q: Which of the following transactions causes an increase in working capital?    a. Sale of merchandise…

A: Working capital = Current assets - Current liabilities

Q: Which of the following is an advantage of EV/EBITDA ratio compared with P/E ratio? A. EV/EBITDA…

A: Financial ratios are the measures that are used in the financial analysis of a corporation, and are…

Q: Which of the following statements is most correct?(a) A decline in the inventory turnover ratio…

A: a) If there is a decline in inventory turnover ratio it indicates that the number of days stock held…

Q: The market-to-book ratio is the ratio of a firm that reports negative retained earnings on its…

A: The market-to-book ratio is also called as Price-to-Book ratio. This ratio is determined to…

Q: : Suppose you are a financial analyst and you have to explain the following statements: a) If one…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: What does the inventory turnover period ratio measure? Select one: a.Profitability. b.The average…

A: INVENTORY TURNOVER PERIOD RATIO IS A FINANCIAL RATIO SHOWING HOW MANY TIMES AN ORGANISATION HAS SOLD…

Q: How does the inventory accounting choice (LIFO/FIFO) impact a firm's valuation? a)Deferring tax…

A: LIFO - Last in First Out method of inventory valuation is based on the concept that the newest…

Q: Which of the ratios listed helps to indicate whether current liabilities could be paid without…

A: The liquidity ratio indicates the ability of the business entity to payout the current liabilities…

Q: Which one of the following will decrease the net working capital of a firm? Assume the current ratio…

A: Net working capital is calculated as difference of current assets and current liabilities

Q: Which of the following statements is true? O A. The DuPont Identity is used to calculate Return on…

A: Ratio analysis is a useful technique for comparing the relationship or the ratio between multiple…

Q: A. Other things being equal, which company appears to have the better liquidity position in terms of…

A: Financial ratios are those which provide a summary of the accounts of a company and helps an…

Q: The current ratio: a. Is used to help assess a company's ability to pay its debts in the near…

A: Current ratio is the ratio between current assets and current liabilities of the business. Current…

Q: 6 ________________are decreases in economic benefits during the accounting period in the form of…

A: Expenses are those expenditures in business which decreases the assets in business also they can…

Q: 1. How is it possible for a firm to be profitable and still go bankrupt? Select one: a. The firm…

A: Current ratio=Current assetsCurrent liabilities

Q: Which of the following statements is false?(a) The quickest way to determine whether a firm has too…

A: Debt to equity ratio shows whether a corporation is having too much debt or not. Hence, the option…