QUESTIONS 45 THROUGH 68 RELATE TO FINANCIAL STATEMENT ANALYSIS

60. - MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM AFTERNOON 2012
MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM AFTERNOON 2012
60. The following data are available for a company and its industry: Company Common-Size Balance Sheet As at 31 December 2010Assets (%)Cash & Short-Term Investments 43.2Accounts Receivable 9.4Inventory 0.6Total Current Assets 53.2Net Property, Plant, and Equipment 3.9Goodwill 40.0Other Long-Term Assets 2.9Total Assets 100.0Liabilities and Shareholders’ EquityShort-Term Debt 1.6Accrued Liabilities and Accounts Payable 17.8Total Current Liabilities 19.4Long-Term Debt 20.1Other Long-Term Liabilities 6.5Total Liabilities 46.0Total Stockholders’ Equity 54.0Total Liabilities & Shareholders’ Equity 100.0Data for comparison Industry Current ratio 3.0Debt-to-equity 50.0%Long-term debt-to-equity 40.0%Which of the following statements about the company is most appropriate? The company: A. operates in the manufacturing industry. B. has made significant acquisitions in the past. C. has higher financial leverage than the industry.