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Exam 13: Analysis of Financial Statements

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Question 101

Multiple Choice

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Powers Company reported net sales of $1,200,000,average Accounts Receivable,net of $78,500,and net income of $51,025.The accounts receivable turnover ratio is:

A) 0.65 times.
B) 14.3 times.
C) 28.6 times.
D) 15.3 times.
E) 16.3 times.

F) C) and D)
G) D) and E)

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Question 102

Multiple Choice

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Match each of the appropriate formulas with correct term. -

A) Days' sales in inventory
B) Dividend yield
C) Total asset turnover
D) Inventory turnover
E) Return on common stockholders' equity
F) Gross margin ratio
G) Days' sales uncollected
H) Profit margin ratio
I) Times interest earned
J) Debt ratio

K) C) and D)
L) A) and D)

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Question 103

Multiple Choice

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Match each of the appropriate formulas with correct term. -

Match each of the appropriate formulas with correct term. -

Refer to the following selected financial information from WorkFit Corporation.Compute the company's acid-test ratio.

A corporation reports the following year-end balance sheet data. -The company's debt ratio equals:

A company reports basic earnings per share of $3.50,cash dividends per share of $0.75,and a market price per share of $64.75.The company's dividend yield equals 21.4%.

Horizontal analysis is used to reveal patterns in data covering successive periods.

Three of the most common tools of financial analysis are (1)________,(2)________,and (3)________.

For the following financial statement items,calculate trend percentages using Year 1 as the base year:

Calculate the percent increase or decrease for each of the following financial statement items:

Graphical analysis of the balance sheet can be useful in assessing sources of financing.

Vertical analysis is a tool to evaluate individual financial statement items or groups of items in terms of a specific base amount.

The background on a company,its industry,and its economic setting is usually included in which of the following sections of a financial statement analysis report?

Describe ratio analysis including its purpose,application,and interpretation.

A company had a market price of $27.50 per share,earnings per share of $1.25,and dividends per share of $0.40.Its price-earnings ratio equals:

Evaluation of company performance does not include analysis of (1)past and current performance,(2)current financial position,and (3)future performance and risk.

Match each of the appropriate formulas with correct term.

Premises

Responses

Profit margin ratio

Total asset turnover

Inventory turnover

Return on common stockholders' equity

Days' sales uncollected

Dividend yield

Gross margin ratio

Debt ratio

Days' sales in inventory

Times interest earned

Premises

Responses

Profit margin ratio

Total asset turnover

Inventory turnover

Return on common stockholders' equity

Days' sales uncollected

Dividend yield

Gross margin ratio

Debt ratio

Days' sales in inventory

Times interest earned

Show Answer

Correct Answer

Premises

Responses

Profit margin ratio

Total asset turnover

Inventory turnover

Return on common stockholders' equity

Days' sales uncollected

Dividend yield

Gross margin ratio

Debt ratio

Days' sales in inventory

Times interest earned

Premises

Profit margin ratio

Total asset turnover

Inventory turnover

Return on common stockholders' equity

Days' sales uncollected

Dividend yield

Gross margin ratio

Debt ratio

Days' sales in inventory

Times interest earned

Responses

A corporation reported cash of $14,000 and total assets of $178,300 on its balance sheet.Its common-size percent for cash equals:

Use the following selected information from Whitman Corp. -To determine the Year 2 and Year 1 trend percentages for cost of goods sold using Year 1 as the base.