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olga_2 [115]
2 years ago
6

Which of the following statements represent a weakness or limitation of ratio analysis? Check all that apply. A firm may operate

in multiple industries. A firm’s financial statements show only one period of financial data. Different firms may use different accounting practices.
Business
1 answer:
Art [367]2 years ago
4 0

Answer: A firm may operate in multiple industries.

Different firms may use different accounting practices.

Explanation:

Ratio Analysis as you probably know is a very useful tool in financial analysis. It works by comparing ratios based on items in the financial statements of a company to measure certain things such as the Company's Liquidity, Profitability and the like.

It does have certain drawbacks though such as,

A firm may operate in multiple industries

When a firm is operating in multiple industries. Comparing ratios is not a simple task. Different industries record profits and costs differently and just because a ratio is held in high esteem on one company does not mean it is good in another thereby making comparison based on ratios alone quite cumbersome.

Different firms may use different accounting practices

Now if different companies use different Accounting practices, you might find that ratios cannot be straightforwardly compared because different types of figures were used by the different companies. For instance, some companies might use a Straight Line Depreciation method as opposed to a Reducing Balance method which will have varying effects on income.

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Xion Co. budgets a selling price of $80 per unit, variable costs of $35 per unit, and total fixed costs of $270,000. During June
nika2105 [10]

Answer and Explanation:

The preparation of flexible budget report is shown below:-

                                              Xion CO.

                                   Flexible budget report

                   Flexible budget    Actual results   Variances  Favorable/

                                                                                           Unfavorable

Sales             $864,000              $885,000        $21,000    Favorable

                   (10,800 × $80)

(-) Variable

cost            $378,000               $351,000          $27,000   Favorable

                    (10,800 × $35)

Contribution  $486,000             $534,000         $48,000   Favorable

(-) Fixed cost   $270,000            $285,000         $15,000   Unfavorable

Net income    $216,000              $249,000           $33,000  Favorable

8 0
2 years ago
Curtis invests $250,000 in a city of Athens bond that pays 7 percent interest. Alternatively, Curtis could have invested the $25
Anna11 [10]

Answer:

7%

Explanation:

Interest income if Curtis invested

250,000 x 9% = 22,500

After tax interest income = 22,500 - (22,500 x 24%)

= 17,100

After tax rate of return = 17,100/250000

0.068

Approximately 7%

7 0
2 years ago
Read 2 more answers
A manager who encourages risk taking and creativity would most likely be in a(n) _______ organizational culture.
Vinil7 [7]

Answer:

Adhocracy Culture

Explanation:

An adhocracy culture is based on energy and creativity. Employees are encouraged to take risks, and leaders are seen as innovators or entrepreneurs. The organization is held together by experimentation, with an emphasis on individual ingenuity and freedom. The core values are based on change and agility.

5 0
2 years ago
EA11.
Vedmedyk [2.9K]

Answer:

$1,700

Explanation:

Given that,

Purchase of raw materials inventory  = $1,000

Assignment of raw materials inventory to Job 5  = $500

Payroll for 20 hours with $1,000 assigned to Job 5

Factory utility bills = $750

Overhead applied at the rate = $10 per hour

Cost assigned to Job 5 at the end of the week:

= Raw materials inventory to Job 5 + Labor cost + Manufacturing Overhead applied

= $500 + $1,000 + ($10 per hour × 20 hours)

= $500 + $1,000 + $200

= $1,700

3 0
2 years ago
For a honda accord, some factors shift demand left and others shift it right, as shown. classify each factor by how it shifts th
djverab [1.8K]

These are the factors by how it shifts the current demand curve to a new position:

Shifts left

- 2% rebate on a Toyota Camry, a substitute good  

- Big sale coming in three months  

Shifts right

- Free brake inspections

- Consumers' income increases by 10%

7 0
2 years ago
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