Exam 13: Financial Statement Analysis

The following information is taken from the financial statements of a company for the current year: On a common size income statement for this year, what is the percentage that would be shown next to the dollar amount of cost of goods sold?

Which of the following statements is not true?

Vesuvius Company has net sales revenue of $780,000, cost of goods sold of $343,200, net income of $119,200, and preferred dividends of $10,000 during the current year. At the beginning of the year, 503,000 shares of common stock were outstanding, and, at the end of the year, 537,000 shares of common stock were outstanding. A total of 1,000 preferred shares were outstanding throughout the year. The company's earnings per share for the current year is closest to:

A company provided the following information: There was no change in contributed capital and there were no dividends declared in the current year. Required: Calculate the return on equity ratio.

The following information is available for a company for the current year: Required: Part a. Calculate the receivables turnover ratio for the current year. Part b. Calculate the days to collect for the current year. Part c. Calculate the inventory turnover ratio for the current year. Part d. Calculate the days to sell for the current year. Round all ratios to two decimal points.

Financial statement analysis is useful for:

An increase in the gross profit percentage indicates that:

A company has a debt-to-assets ratio of 0.45 and a return on equity ratio of 10%. If the company then issues additional shares of common stock for cash, which of the following is a correct statement?

Which of the following statements about liquidity and solvency ratios is correct?

Which of these are liquidity ratios?

Which income statement line item had the largest percentage increase from the prior year to the current year?

If the debt-to-assets ratio is 0.63, it means that 37% of the company's financing has been provided by stockholders' equity

Vertical analysis is the comparison of a company's financial information over time

If net sales revenue for a retail chain has been relatively constant for the last four years, but the fixed asset turnover has been decreasing, what would be the most likely cause?

Husain, Inc.'s income statement and other financial information for the current year is presented below. Required: Part a. Perform vertical analysis of the income statement. (Round to the nearest whole percentage.) Part b. Calculate the debt-to-assets ratio. (Round to two decimal places.) Part c. Calculate the times interest earned ratio. (Round to two decimal places.) Part d. Evaluate the company's solvency.

To perform a vertical analysis of an income statement, you would divide each line item on the statement by:

To analyze changes in a company's sales over the last five years, you should perform:

Ratio analysis:

The financial information below presents selected information from the financial statements of Pelican Company. Sales revenue during the current year was $13,700,300 and cost of goods sold was $8,905,195. All of Pelican's sales are made on account and are due within 30 days. Required: Part a. Current ratios as of the end of the current and prior year. Part b. Calculate the receivables turnover ratio for the current year. Part c. Calculate the days to collect for the current year. Part d. Calculate the inventory turnover ratio for the current year. Part d. Calculate the days to sell for the current year. Part e. Evaluate the company's liquidity position at the end of the current year. Cite any additional information not given in the problem that would be helpful in evaluating the company's liquidity. Round all ratios to two decimal places.

Which of the following ratios is used to evaluate solvency?