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Free CFA Financial Statement Analysis Practice Questions & Answers

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Question 151

A company issues new debt to repurchase shares. What happens?

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Question 152

A company’s total assets rise while sales stay flat. What happens to asset turnover?

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Question 153

A company’s profit rises due to a one‑time gain. What should an analyst do?

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Question 154

A company frequently reclassifies normal expenses as “special items.” What does this indicate?

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Question 155

A company’s depreciation expense falls while assets stay constant. What is the likely effect?

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Question 156

A company delays recognizing an impairment. What happens?

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Question 157

A company’s auditor resigns unexpectedly. What does this indicate?

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Question 158

A company recognizes an impairment. What is the effect?

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Question 159

A company frequently reports “one‑time charges.” What does this suggest?

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Question 160

A company’s profit rises but receivables rise even faster. What is the likely cause?

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Question 161

A company’s debt rises faster than equity. What happens?

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Question 162

A company increases its estimate of future repair costs. What happens?

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Question 163

A company frequently reports “special charges.” What does this suggest?

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Question 164

A company’s auditor resigns unexpectedly. What does this indicate?

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Question 165

A company recognizes an impairment on equipment. What is the effect?

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Question 166

A company increases its estimate of future warranty costs. What happens?

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Question 167

A company frequently changes its depreciation method. What does this suggest?

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Question 168

A company’s auditor issues a warning about uncertainty in future operations. What does this indicate?

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Question 169

A company’s receivables rise much faster than sales. What is the likely cause?

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Question 170

A company frequently reports “one‑time charges.” What does this suggest?

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Question 171

A company recognizes an impairment on a building. What is the effect?

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Question 172

A company increases its estimate of future warranty claims. What happens?

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Question 173

A company frequently changes its revenue recognition assumptions. What does this suggest?

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Question 174

A company’s auditor issues a warning about internal controls. What does this indicate?

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Question 175

A company’s inventory days fall while sales fall. What does this suggest?

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Question 176

A company recognizes an impairment on machinery. What is the effect?

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Question 177

A company’s interest expense falls, but its debt level rises. What explains this?

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Question 178

A company’s tax expense falls even though profit rises. What explains this?

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Question 179

A company’s debt‑to‑assets ratio falls while its debt stays constant. What explains this?

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Question 180

A company’s leverage falls even though equity stays constant. What explains this?

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Free CFA Financial Statement Analysis Practice Questions & Answers

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