Exam 16: Financial Statement Analysis

Two major forms of common-size analysis are horizontal analysis and vertical analysis.

A company has a receivables turnover of 15 times.The average net receivables during the period are $430,000.What is the amount of net credit sales for the period?

In horizontal analysis,the base year can be the immediately preceding period,or it can be a period further in the past.

The quick ratio

Presented below are selected data from the financial statements of Harper Company for 2012,2011,and 2010.

Creditors would like the debt-to-equity ratio to be _______,indicating that stockholders have financed most of the assets of the firm.

Selected financial data from Harlow Company for the most recent year appear below: The income tax rate is 30 percent. The return on sales ratio was closest to

An aircraft company would most likely have

Figure 16-2. Financial statements for Grange Company appear below: Dividends during 2012 totaled $127,000,of which $5,000 were preferred dividends. The market price of a share of common stock on December 31,2012,was $100. Refer to Figure 16-2. Required: Compute the following leverage ratios for 2012:

Figure 16-2. Financial statements for Grange Company appear below: Dividends during 2012 totaled $127,000,of which $5,000 were preferred dividends. The market price of a share of common stock on December 31,2012,was $100. Refer to Figure 16-2. Required: Compute the following liquidity ratios for 2012:

The average stockholders' equity for Holloway Co.last year was $2,000,000.Included in this figure was $200,000 par value of 8 percent preferred stock.If the return on common stockholders' equity was 12.5 percent for the year,net income was

The current assets of Caitlin Company are $360,000.The current liabilities are $240,000.The current ratio is

What do profitability ratios measure and what is their significance?

Figure 16-7 There were 30,000 shares of common stock outstanding throughout 2011.Dividends on common stock amounted to $21,000 and dividends on preferred stock amounted to $30,000.The market value of a share of common stock was $36 at the end of 2011.The income tax rate is 40%.The accounts receivable and inventory accounts had beginning balances of $58,500 and $101,400 respectively.Total assets at the beginning of the year were $430,500. Refer to Figure 16-7. Required: Calculate the following ratios: A.Debt ratio B.Debt-to-equity ratio State what information each ratio is providing to the company.

The following information is available from the balance sheets at the end of 2012 and 2011 for Shelley Company: Net income for 2012 and 2011 was $340,000 and $300,000,respectively.Interest expense was $45,000 for 2012 and the tax rate is 30 percent.Answer the following:

Many industrial averages and figures are published in the each of the following except?

The _________________ is a measure of liquidity that compares only the most liquid assets with current liabilities. or

Winter Corporation has issued common stock only.The company has been successful and has a gross profit rate of 20%.The information shown below was taken from the company's financial statements.

In vertical analysis of the balance sheet,total liabilities are represented by 100 percent.

When computing the quick ratio,a short-term note receivable would be included.