Deck 6: Perform the Analysis: Descriptive Analyses

Question 1

Which measure would help us evaluate what happens in the highest and lowest 20 percent of the data?

A) Quintiles
B) Quartiles
C) Average
D) Deciles

Answer 1

A

Question 2

In vertical analysis, the relevant base for cost of goods sold is which of the following?

A) Sales revenue
B) Total assets
C) Total stockholders' equity
D) Total credit sales

Answer 2

A

Question 3

A company's descriptive statistics are appropriately compared to either 1) the economy as a whole, 2) the company's respective industry, 3) competitors and 4) the company's own prior performance.

Answer 3

True

Question 4

If you have minimums and maximums that are far away (several standard deviations away from the mean) from the rest of the data observations, medians would be the best measure of central tendency?

Question 5

While a __________ reorganizes and summarizes certain data using cross-tabulations without changing the underlying spreadsheet (or data), a __________ is a graphical depiction of those cross-tabulations.

A) pivot chart; pivottable
B) pivottable; pivot chart
C) histogram; pivottable
D) graph; table

Question 6

In vertical analysis, the relevant base for long-term debt is which of the following?

A) Sales revenue
B) Total assets
C) Total equity
D) Total liabilities

Question 7

Descriptive statistics are analytics that characterize, summarize, and organize features and properties of the data to facilitate understanding.

Question 8

All other things equal, in which of the following buckets would you expect the least amount of aged receivables to be?

A) 31-60 days
B) 61-90 days
C) 1-30 days
D) 91-120 days

Question 9

Dupont analysis allows an analysis of profit margins, asset turnover and liquidity.

Question 10

Descriptive analytics address the question, "Why it happened?".

Question 11

The calculation for return on equity using Dupont Analysis is:

A) Profit margin x Asset turnover x Financial leverage
B) Profit margin x Asset turnover
C) Asset turnover x Financial leverage
D) Gross profit margin x Asset turnover x Financial leverage

Question 12

Which would have a higher expected profit margin (per dollar of sales) than the others?

A) Real estate
B) Shaving cream
C) Bananas
D) Ice cream

Question 13

To compute the percentage change in a horizontal analysis from last year to this year, the computation will be:

A) (Current Year - Last Year)/ Last Year.
B) (Last Year- Current Year)/ Last Year.
C) (Last Year- Current Year)/ Current Year.
D) (Current Year- Last Year)/ Current Year.

Question 14

Department stores have faster asset turnover than airline companies.

Question 15

Financial statements already contain many of the counts, totals, sums, averages, subtotals, minimums, and maximums that are needed as part of accounting descriptive analytics.

Question 16

Which type of analytics generally would go first when addressing an accounting issue?

A) Predictive analytics
B) Prescriptive analytics
C) Diagnostic analytics
D) Descriptive analytics

Question 17

Jewelry stores have smaller profit margins than grocery stores.

Question 18

Diagnostic analytics emphasizes "What happened?".

Question 19

Which ratio does not include a component to evaluate financial leverage?

A) Return on assets
B) Return on equity
C) Return on sales
D) Return on investment

Question 20

Descriptive analysis is always the first type of data analytics performed.

Question 21

Descriptive analytics is part of which component of the AMPS model?

A) Ask the Question
B) Perform the Analysis
C) Share the Story
D) Master the Data

Question 22

Of the following measures, the best way to analyze the extreme values in the sample is to consider the __________.

A) mean
B) maximum or minimum
C) mode
D) standard deviation

Question 23

__________ provides comparative changes about various line items of each financial statement over time.

A) Vertical analysis
B) Horizontal analysis
C) Percentage change
D) A pivotable

Question 24

Descriptive analytic measures of central tendency include all except which of the following?

A) Counts
B) Means
C) Medians
D) Modes

Question 25

An illustration of the total aged receivables in each 30-day bucket is an example of a __________.

A) histogram
B) pivot chart
C) line chart
D) horizontal analysis

Question 26

Comparing the extent of long-term debt to equity is an example of __________.

A) Vertical analysis
B) Horizontal analysis
C) Ratio analysis
D) Pivottables

Question 27

Of the following measures, the best measure for evaluating firm efficiency in handling and using assets is __________.

A) asset turnover
B) return on assets
C) profit margin
D) return on equity

Question 28

The __________ explains the changes in retained earnings from net income or losses and any (cash) dividends paid to investors.

A) Statement of cash flows
B) Balance sheet
C) Income statement
D) Statement of stockholders' equity

Question 29

Of the following measures, the best way to analyze the variability in the sample is to consider the __________.

A) mean
B) maximum or minimum
C) mode
D) standard deviation

Question 30

The __________ provide details on the accounting policies chosen.

A) management discussion and analysis section
B) footnotes
C) analyst report
D) financial statements

Question 31

Descriptive analytic measures of variability include all except which of the following?

A) Minimums
B) Maximums
C) Standard Deviation
D) Medians

Question 32

Descriptive analytics are characterized by__________ of the relevant data.

A) summarization
B) uncovering patterns
C) what-if scenarios
D) cash flow analysis

Question 33

The __________ reveals the detailed company cash inflows and cash outflows during the year.

A) statement of cash flows
B) footnotes
C) balance sheet
D) statement of cash inflows and outflows

Question 34

Accountants generally use __________ to assess the ultimate collectability of accounts receivables and estimate the allowance for doubtful accounts.

A) customer credit scores
B) aging receivables analysis
C) analysis of receivables by customer size
D) customer profitability

Question 35

__________ are brief, generally small, visuals that fit within one cell in Excel that visually depict what happened in the cells next to it.

A) Small graphics
B) Sparklines
C) Pivot charts
D) Analytic charts

Question 36

__________ explains the extent to which a data item gains or loses magnitude or value.

A) Vertical analysis
B) Horizontal analysis
C) Percentage change
D) A pivotable

Question 37

Descriptive quantitative analytic measures of financial statements to help evaluate liquidity, solvency, profitability and efficiency are called __________.

A) vertical analysis
B) horizontal analysis
C) ratio analysis
D) pivottables

Question 38

__________ expresses financial information in relation to some relevant figure or base.

A) Vertical analysis
B) Horizontal analysis
C) Ratio analysis
D) Pivottables

Question 39

A __________ is a display of rectangles with area proportional to the underlying frequency of the data.

A) histogram
B) frequency diagram
C) line chart
D) pie chart

Question 40

The __________ recent the accounts receivable (i.e., shorter amount of time it has been outstanding), the __________ likely it will be that they will ultimately be collected.

A) more, more
B) less, more
C) more, less
D) more, equally

Question 41

If the profit margin is 0.2158, asset turnover is 0.5389 and financial leverage is 1.2047, what is the return on equity?

A) 0.1401
B) 0.6492
C) 0.1163
D) 0.5389

Question 42

The Dupont Analysis measures which of these performance categories?

A) Profitability, Liquidity, and Solvency
B) Profitability, Activity, and Solvency
C) Activity, Liquidity, and Solvency
D) Activity, Liquidity, and Profitability

Question 43

If the profit margin is 0.2158, asset turnover is 0.5389 and financial leverage is 1.2047, what is the return on asset?

A) 0.1401
B) 0.6492
C) 0.1163
D) 0.5389

Question 44

If the profit margin is 0.1142, asset turnover is 0.5619 and financial leverage is 1.2937, what is the return on equity?

A) 0.0830
B) 0.0642
C) 0.1142
D) 0.7269

Question 45

In addition to an aging analysis to establish an allowance for doubtful accounts, a __________ system may be used to assess the ability of customers to pay outstanding receivables.

A) supply chain system
B) credit analysis
C) customer relationship management (CRM)
D) customer diagnostic analytics

Question 46

A diagram showing interrelationships between two or more variables is called a __________.

A) graph
B) pivottable
C) histogram
D) variance analysis

Question 47

Summarizing data to understand what has happened is what type of analytics?

A) Descriptive analytics
B) Diagnostic analytics
C) Predictive analytics
D) Prescriptive analytics

Question 48

Descriptive analytics of a return on market equity performed by researchers, __________ , provide examples of a possible anomaly right around zero that requires further analysis.

A) Burgstahler and Dichev
B) Deutch and Sensenbrenner
C) Davis and Castro
D) Buck and Jordan

Question 49

Profit margin is computed as follows:

A) Net profit (net income) / Sales
B) Gross profit / Sales
C) Net profit (net income) / Assets
D) Gross profit / Sales

Question 50

The calculation (New - Old)/Old would be used primarily in:

A) dupont analysis
B) vertical analysis
C) horizontal analysis
D) ratio analysis

Question 51

An analysis which expresses financial information in relation to some relevant figure or base is called __________.

A) Dupont analysis
B) vertical analysis
C) horizontal analysis
D) ratio analysis

Question 52

Asset turnover is computed as follows:

A) Sales / Assets
B) Assets / Sales
C) Net profit (net income) / Assets
D) Gross profit / Assets

Question 53

If the profit margin is 0.0891, asset turnover is 0.4732 and financial leverage is 1.1957, what is the return on equity?

A) 0.0504
B) 0.0421
C) 0.5658
D) 0.5623

Question 54

__________ analytics are often the first type of analytics performed that leads to other types of analytics for further investigation.

A) Descriptive
B) Diagnostic
C) Predictive
D) Prescriptive

Question 55

If the profit margin is 0.1142, asset turnover is 0.5619 and financial leverage is 1.2937, what is the return on asset?

A) 0.0830
B) 0.0642
C) 0.1142
D) 0.7269