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Free CFA Financial Statement Analysis Practice Questions & Answers

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Question 61

A company’s debt‑to‑equity ratio rises sharply. What is the most likely implication?

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Question 62

Which pattern indicates low‑quality earnings?

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Question 63

Which is a warning sign of potential manipulation?

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Question 64

A company capitalizes software development costs that competitors expense. What is the likely impact?

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Question 65

A company’s largest segment shows declining profit while smaller segments grow. What is the most likely concern?

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Question 66

A segment shows rising revenue but falling operating margin. What is the likely cause?

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Question 67

A company allocates too many shared costs to a low‑performing segment. What is the effect?

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Question 68

A company’s geographic segment in a high‑inflation country shows rising revenue in local currency but flat revenue in reporting currency. Why?

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Question 69

A company issues new equity to repay debt. What happens?

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Question 70

A company buys a 5% stake in another firm with no influence. How is it typically measured?

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Question 71

A company acquires 40% of another firm and has board representation. What method applies?

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Question 72

Under the equity method, the investor’s share of the investee’s loss:

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Question 73

Goodwill is tested for impairment when:

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Question 74

Which pattern suggests earnings manipulation?

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Question 75

A company’s debt‑to‑equity ratio rises. What does this indicate?

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Question 76

A company’s solvency risk increases when:

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Question 77

A company’s long‑term debt falls while total assets stay constant. What happens to the debt‑to‑assets ratio?

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Question 78

A company buys a small stake in another firm with no influence. What is the typical measurement basis?

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Question 79

A company owns 35% of another firm and participates in decisions. What method applies?

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Question 80

Goodwill is impaired when:

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Question 81

A company’s valuation multiple rises even though earnings fall. What is the likely reason?

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Question 82

A company records revenue when goods are shipped, even though the customer has not agreed to accept delivery yet. What does this most likely indicate?

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Question 83

Which situation most likely signals low earnings quality?

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Question 84

A company’s revenue increases, but its deferred revenue balance also increases. What does this imply?

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Question 85

Which pattern suggests that revenue growth may not be sustainable?

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Question 86

A company offers large discounts at year‑end to boost sales. What is the likely effect?

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Question 87

High accruals relative to cash flow typically indicate:

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Question 88

Which adjustment increases accruals?

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Question 89

A company’s accruals decrease while cash flow rises. What does this imply?

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Question 90

A company estimates a higher warranty expense. What happens?

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Free CFA Financial Statement Analysis Practice Questions & Answers

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