302 F!

a. PPI

b. CPI

c. CES

2. Which of the economic indicators that we reviewed is the leading measure for evaluating the health of the economy_______________________

3. Which of the economic indicators that we reviewed measures the stock market ______________________

4. When analyzing financial statements, which ratio calculation measures business liquidity ___________________________________

5. When analyzing financial statements, what can you conclude when the inventory turnover ratio increases from 4.0 to 6.0 over a three year period.

a. The day’s inventory held are within the typical industry average

b. The day’s inventory held has increased over time

c. The day’s inventory held has decreased over time

6. When analyzing financial statements, what can you conclude when the accounts receivable turnover ratio decreases from 9.0 to 6.0 over a three year period.

a. Collections are within standard terms

b. The collection period has increased over time

c. The collection period has decreased over time

7. When analyzing financial statements, what can you conclude when the accounts payable turnover ratio is 9.0 and the industry average is 12.0? _______________________________________________________________________________________________________

8. When analyzing the Statement of Cash Flows, what can you conclude when there is a negative cash flow from operations, positive cash flow from investing (sale of fixed assets) and a positive cash flow from financing (borrowing from banks)_____________________________________________________________________________________________________________

9. When analyzing financial statements, besides reviewing data year over year for comparisons, the analyst should also compare the data to_________________________________________

10. Give an example of “separation of duties “ in the accounting department of a small business _________________________________________________________________________________________________________________

11. Explain the meaning of “rationalization” with respect to internal control and the Fraud Triangle ________________________________________________________________________________________________________________

12. How can a business owner with very few employees implement internal controls?

a. Due to small number of employees it is not feasible.

b. Rotate job duties among employees.

c. Hire a CPA to monitor transactions weekly.

13. The Debt to Equity ratio calculation measures

a. The ability of the company to pay its’ current obligations

b. The amount of Assets that are financed by debt

c. The amount of capital invested by the owners relative to the debt of the company

14. The Earnings Quality ratio calculation measures how much of the net income is converted to cash. TRUE FALSE

Use Word to answer the questions and submit to me via Canvas by the due date