题目

 Part of a company's draft statement of cash flows is shown below:

                                                             $!000

Net profit before tax                             8,640

Depreciation charges                         (2,160)

Proceeds of sale of non-current assets  360

Increase in inventory                             (330)

Increase in accounts payable                 440

The following criticisms of the above extract have been made:

1 Depreciation charges should have been added, not deducted.

2 Increase in inventory should have been added, not deducted.

3 Increase in accounts payable should have been deducted, not added.

4 Proceeds of sale of non-current assets should not appear in this part of the statement of cash flows.

Which of these criticisms are valid?

A

2 and 3 only

B

1 and 4 only

C

1 and 3 only

D

2 and 4 only

Chapter22Statementsofcashflows

Depreciation should be added back as it not a cash flow and proceeds of sale of non-current assets appears under 'investing' cash flows.

多做几道

Which of the following is a ratio which is used to measure how much a business owes in relation to its  size?  

A

Asset turnover

B

Profit margin

C

Gearing

D

Return on capital employed

A business operates on a gross profit margin of 331/3%. were $680.  Gross profit on a sale was $800, and expenses

What is the net profit margin?  

A

3.75%

B

 5%

C

11.25%

D

22.67%

 A company has the following details extracted from its statement of financial position:

                                    $'000

Inventories                  1,900

Receivables                1,000

Bank overdraft            100

Payables                     1,000

The industry the company operates in has a current ratio norm of 1.8. Companies who manage liquidity well in this industry

have a current ratio lower than the norm.

Which of the following statements accurately describes the company’s liquidity position?

A

Liquidity appears to be well managed as the bank overdraft is relatively low

B

Liquidity appears to be poorly-controlled as shown by the large payables balance

C

Liquidity appears to be poorly-controlled as shown by the company’s relatively high current ratio

D

 Liquidity appears to be poorly-controlled as shown by the existence of a bank

Why is analysis of financial statements carried out?

A

So that the analyst can determine a company’s accounting policies

B

So that the significance of financial statements can be better understood through comparisons

with historical performance and with other companies

C

To get back to the ‘real’ underlying figures, without the numbers being skewed by the

requirements of International Financial Reporting Standards

D

To produce a report that can replace the financial statements, so that the financial statements

no longer need to be looked at

 Which of the following transactions would result in an increase in capital employed?

A

Selling inventory at a profit

B

 Writing off a bad debt

C

Paying a payable in cash

D

Increasing the bank overdraft to purchase a non-current asset 

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