FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 14: Financial Statement Analysis

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 81

True/False

Review LaterAdd Note

Review Later

In computing the asset turnover ratio, long-term investments are excluded from average total assets.

A) True
B) False

Correct Answer

verified

Show Answer

Question 82

Multiple Choice

Review LaterAdd Note

Review Later

The percentage analysis of increases and decreases in individual items in comparative financial statements is called

A) vertical analysis
B) solvency analysis
C) profitability analysis
D) horizontal analysis

E) B) and C)
F) B) and D)

Correct Answer

verified

Show Answer

Question 83

Essay

Review LaterAdd Note

The balance sheet for Seuss Company at the end of the current fiscal year indicated the following: Income before income tax was $1,500,000 and income taxes were $200,000 for the current year. Cash dividends paid on common stock during the current year totaled $150,000. The common stock sells for $75 per share at the end of the year.​ Determine each of the following: Round to one decimal place except earnings per share and dividends per share, which should be rounded to two decimal places.

Match each ratio that follows to its use (items a-h) . Items may be used more than once. -asset turnover ratio

All of the following are typically included in the management's discussion and analysis in annual reports except

Match each ratio that follows to its use (items a-h). Items may be used more than once. -Cash and accounts receivable for Adams Company are provided below: What is the amount and percentage of increase or decrease that would be shown with horizontal analysis? A)assess the profitability of the assets B)assess how effectively assets are used C)indicate the ability to pay current liabilities D)indicate how much of the company is financed by debt and equity E)indicate instant debt-paying ability F)assess the profitability of the investment by common stockholders G)indicate future earnings prospects H)indicate the extent to which earnings are being distributed to common stockholders

The following data are taken from the financial statements: (a)Determine for each year (1) the inventory turnover, round answer to one decimal place.(2) the number of days' sales in inventory. Round intermediate calculations to whole numbers and final answers to two decimal places.(b)Comment on the favorable and unfavorable trends revealed by the data.

The number of days' sales in inventory is one means of expressing the relationship between the cost of goods sold and inventory.

The balance sheets at the end of each of the first two years of operations indicate the following: -Using the balance sheets for Kellman Company, if net income is $150,000 and interest expense is $20,000 for Year 2, what is the return on total assets for the year?

A firm selling food should have higher inventory turnover rate than a firm selling office furniture.

The numerator in calculating the accounts receivable turnover is

Income statement information for Sadie Company is below: Using vertical analysis of the income statement for Sadie Company, determine the gross profit margin.

-Based on the data for Privett Company, what is the amount of quick assets?

Dollar amounts of working capital are difficult to assess when comparing companies of different sizes or in comparing such amounts with industry figures.

In a common-sized income statement, each item is expressed as a percentage of net income.

Analyzing a company's performance should take into account conditions peculiar to the industry and the general economic conditions.

Match each ratio that follows to its use (items a-h) . Items may be used more than once. -working capital

-Based on the data for Harding Company, what is the amount of working capital?

The following items were taken from the financial statements of Tilden, Inc., over a three-year period: Compute the following for each of the items listed.​ (a)The amount and percentage change from Year 2 to Year 3.(b)The amount and percentage change from Year 1 to Year 2.Round percentages to one decimal place.

A change from one acceptable accounting method to another is reported