data analytics chp 6

(T/F) Diagnostic analytics emphasizes "What happened?"

FALSE

(T/F)

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.

TRUE

(T/F) Descriptive analytics are analytics that characterize, summarize, and organize features and properties of the data to facilitate understanding.

TRUE

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

TRUE

(T/F)

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

FALSE

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

(Current Year - Last Year)/ Last Year.

(Last Year- Current Year)/ Last Year.

(Last Year- Current Year)/ Current Year.

(Current Year- Last Year)/ Current Year.

(Current Year - Last Year)/ Last Year.

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

Sales revenue

Total assets

Total stockholders' equity

Total credit sales

Sales revenue

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

31-60 days

61-90 days

1-30 days

91-120 days

91-120 days

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

Sales revenue

Total assets

Total equity

Total liabilities

Total assets

The calculation for return on equity using Dupont Analysis is:

Profit margin x Asset turnover x Financial leverage

Profit margin x Asset turnover

Asset turnover x Financial leverage

Gross profit margin x Asset turnover x Financial leverage

Profit margin x Asset turnover x Financial leverage

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

Return on assets

Return on equity

Return on sales

Return on investment

Return on assets

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.

pivot chart; pivottable

pivottable; pivot chart

histogram; pivottable

graph; table

pivottable; pivot chart

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

asset turnover

return on assets

profit margin

return on equity

ASSET TURNOVER

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.

more, more

less, more

more, less

more, equally

MORE,MORE

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

mean

maximum or minimum

mode

standard deviation

maximum or minimum

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

mean

maximum or minimum

mode

standard deviation

standard deviation

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

vertical analysis

horizontal analysis

ratio analysis

pivottables

ratio analysis

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

Vertical analysis

Horizontal analysis

Ratio analysis

Pivottables

Vertical analysis

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

Vertical analysis

Horizontal analysis

Percentage change

A pivotable

Horizontal analysis

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

Small graphics

Sparklines

Pivot charts

Analytic charts

Sparklines

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

histogram

frequency diagram

line chart

pie chart

histogram

Descriptive analytics are characterized by __________ of the relevant data.

summarization

uncovering patterns

what-if scenarios

cash flow analysis

summarization

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

Vertical analysis

Horizontal analysis

Ratio analysis

Pivottables

Ratio analysis

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

histogram

pivot chart

line chart

horizontal analysis

histogram

Profit margin is computed as follows:

Net profit (net income) / Sales

Gross profit / Sales

Net profit (net income) / Assets

Gross profit / Assets

Net profit (net income) / Sales

Asset turnover is computed as follows:

Sales / Assets

Assets / Sales

Net profit (net income) / Assets

Gross profit / Assets

Sales / Assets

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

0.0830

0.0642

0.1142

0.7269

0.0642

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

0.0830

0.0642

0.1142

0.7269

0.0830

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

Descriptive

Diagnostic

Predictive

Prescriptive

Descriptive