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Finance practice problems

25. A common size income statement:
a. uses the same dollar amount of revenues for each year.
b. expresses items as a percentage of revenues.
c. makes comparisons between years more difficult.
d. is useful in estimating the impact of inflation.

26. Which of the following is(are) an example of a measure of leverage?
a. Debt yield.
b. Debt payout ratio.
c. Preferred dividend coverage ratio.
d. Debt/equity ratio.
e. All of these.

27. Which of the following activities is not part of the management planning and control cycle:
a. data collection and performance feedback.
b. implementation of plans.
c. providing information to investors and creditors.
d. revisiting plans.

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25. A common size income statement:
b. expresses items as a percentage of revenues.
Every amount is converted to a percent of sales! On a common size balance sheet, everything is converted to a percent of total assets.

26.
Which of ...

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Classics!

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