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Exam 14: Financial Statement Analysis

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Question 101

Multiple Choice

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What type of analysis is indicated by the following?

A)
B)
C)
D)

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

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Question 102

Multiple Choice

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In a common-sized income statement, 100% is the

A) net cost of goods sold
B) net income
C) gross profit
D) sales

E) None of the above
F) C) and D)

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Question 103

Multiple Choice

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Match each definition that follows with the term a-h it defines. -an event or transaction that is both unusual and infrequent

Assume the following sales data for a company: Current year $325,000 Preceding year 250,000 What is the percentage increase in sales from the preceding year to the current year?

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

Using measures to assess a business's ability to pay its current liabilities is called current position analysis.

Which of the following is not a characteristic evaluated in ratio analysis?

The following items are reported on a company's balance sheet: Determine the a current ratio, and b quick ratio.Round your answer to one decimal place.

An acceleration in the collection of receivables will tend to cause the accounts receivable turnover to

Match each definition that follows with the term a-h it defines. -the percentage analysis of the relationship of each component in a financial statement to a total within the statement

Comparing dividends per share to earnings per share indicates the extent to which the corporation is retaining its earnings for use in operations.

Unusual items affecting the prior period's income statement consist of errors and changes in accounting principles.

A company reports the following: Determine the a rate earned on stockholders' equity, and b rate earned on common stockholders' equity.Round to one decimal place.

If net income is $250,000 and interest expense is $20,000 for Year 2, and the market price of common shares is $30, what is the price-earnings ratio on common stock for Year 2? Round intermediate calculation to two decimal places and final answers to one decimal place.

The following information was taken from the financial statement of Fox Resources for December 31 of the current fiscal year: The net income was $600,000, and the declared dividends on the common stock were $125,000 for the current year.The market price of the common stock is $20 per share. Required: Calculate for the common stock: a earnings per share b the price-earnings ratio c the dividends per share and the dividend yield Round to one decimal place except earnings per share, which should be rounded to two decimal places.

The ratio of fixed assets to long-term liabilities provides a measure of a firm's ability to pay dividends.

Match each ratio that follows to its use items a-h.Items may be used more than once. -ratio of sales to assets

A company reports the following: Sales $1,200,000 Average accounts receivable net 50,000 Determine the a accounts receivable turnover, and b number of days' sales in receivables.Round your answer to one decimal place.