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NEW QUESTION: 1
William Jones, CFA, is analyzing the financial performance of two U.S. competitors in connection with a potential investment recommendation of their common stocks. He is particularly concerned about the quality of each company's financial results in 2007-2008 and in developing projections for 2009 and 2010 fiscal years.
Adams Company has been the largest company in the industry but Jefferson Inc. has grown more rapidly in recent years. Adams's net sales in 2004 were 33-1/3% higher than Jefferson but were only 18% above Jefferson in 2008. During 2008, a slowing U.S. economy led to lower domestic revenue growth for both companies. The 10-k reports showed overall sales growth of 6% for Adams in 2008 compared to 7% for
2007 and 9% in 2006. Jefferson's gross sales rose almost 12% in 2008 versus 8% in 2007 and 10% in
2006. In the past three years, Jefferson has expanded its foreign business at a faster pace than Adams. In
2008, Jefferson's growth in overseas business was particularly impressive. According to the company's 10- k report, Jefferson offered a sales incentive to overseas customers. For those customers accepting the special sales discount, Jefferson shipped products to specific warehouses in foreign ports rather than directly to those customers' facilities.
In his initial review of Adams's and Jefferson's financial statements, Jones was concerned about the quality of the growth in Jefferson's sales, considerably higher accounts receivables, and the impact of overall accruals on earnings quality. He noted that Jefferson had instituted an accounting change in 2008. The economic life for new plant and equipment investments was determined to be five years longer than for previous investments. For Adams, he noted that the higher level of inventories at the end of 2008 might be cause for concern in light of a further slowdown expected in the U.S. economy in 2009.
The accompanying table shows financial data for both companies' Form 10-k reports for 2006-2008 used by Jones for his analysis. To evaluate sales quality, he focused on trends in sales and related expenses for both companies as well as cash collections and receivables comparisons. Inventory trends relative to sales and the number of days' sales outstanding in inventory were determined for both companies. Expense trends were examined for Adams and Jefferson relative to sales growth and accrual ratios on a balance sheet and cash flow basis were developed as overall measures of earnings quality.
Comparisons of expense trends in 2007-2008 showed:
A. higher growth of Adams's SG&A and depreciation expense versus Jefferson; the small change in Jefferson's depreciation may relate to the change in depreciation lives while the slower SG&A growth may reflect expense controls imposed to offset lower gross profit margins.
B. higher growth of Adams 's SG&A and depreciation expense versus Jefferson may indicate more effective expense control by Jefferson in a slowing domestic economy.
C. Jefferson's management appeared to have managed SG&A and depreciation expenses more effectively than Adams; there was a small increase in Jefferson's depreciation expense and slower growth in SG&A relative to the company's previous year and compared to Adams's frends.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
The more favorable trends in Jefferson's expenses may reflect more aggressive depreciation accounting and controls imposed on discretionary expenses to offset declining gross profit margins. (Study Session 7, LOS 25-f)
NEW QUESTION: 2
企業は、プライベートサブネットを通過するときにすべてのIPパケットの送信元、宛先、およびプロトコルを記録することを要求しています。これは、この目的を達成するための最も安全で信頼性の高い方法です。
A. AWS CloudTrailのログ記録を有効にし、ログファイルを保存するためのAmazon S3バケットを指定します。
B. プライベートAmazon EC2インスタンスで送信元送信先チェックを有効にします。
C. Amazon CloudWatchログを作成してパケット情報をキャプチャします。
D. サブネット上にVPCフローログを作成します。
Answer: D
NEW QUESTION: 3
Sara, a security manager, has decided to force expiration of all company passwords by the close of business day. Which of the following BEST supports this reasoning?
A. Implementation of account lockout procedures.
B. Enforcement of password complexity requirements.
C. Implementation of configuration management processes.
D. A recent security breach in which passwords were cracked.
Answer: D
Explanation:
Explanation/Reference:
Explanation:
A password only needs to be changed if it doesn't meet the compliance requirements of the company's password policy, or is evidently insecure. It will also need to be changed if it has been reused, or due to possible compromise as a result of a system intrusion.