Exam 13: Financial Statement Analysis

Tito Corporation had net income of $2,000,000 and paid dividends to common stockholders of $300,000 in 2017. The weighted average number of shares outstanding in 2017 was 400,000 shares. Tito Corporation's common stock is selling for $50 per share on the NASDAQ. Tito Corporation's payout ratio for 2017 is

In horizontal analysis, if an item has a negative amount in the base year, and a positive amount in the following year, no percentage change for that item can be computed.

The following information pertains to Blue Flower Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the current ratio for this company?

In horizontal analysis, each item is expressed as a percentage of the

The following information pertains to Unique Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the inventory turnover for this company?

Lupton Inc. disposes of an unprofitable segment of its business. The operation of the segment suffered a $200,000 loss in the year of disposal. The loss on disposal of the segment was $100,000. If the tax rate is 30%, and income before income taxes was $1,600,000,

Operating data for Panola Land Corporation are presented below 2017 2016 Sales revenue \ 800,000 \ 600,000 Cost of goods sold 480,000 390,000 Selling expenses 120,000 78,000 Administrative expenses 80,000 54,000 Income tax expense 24,000 25,000 Net income 96,000 53,000 Instructions Prepare a schedule showing a vertical analysis for 2017 and 2016.

Tim Forsyth, the CEO of Magical Products, is a successful entrepreneur and his focus is his products, not his accounting system. He asks you to explain to him, in a memo, the bases of comparison for ratio analysis.

Somen to Park Corporation had net credit sales of $5,075,000 and cost of goods sold of $3,750,000 for the year. The Accounts Receivable balances at the beginning and end of the year were $650,000 and $750,000, respectively. The accounts receivable turnover was

A common measure of liquidity is

Inventory turnover is a measure of liquidity that focuses on efficient use of inventory.

A common measure of profitability is the

Using these data from the comparative balance sheet of K. Leen Company, perform vertical analysis.

In a common size balance sheet, total assets are represented by 100%.

Corsig Corporation had the following comparative current assets and current liabilities: During 2017, net credit sales and cost of goods sold were $570,000 and $350,000, respectively. Net cash provided by operating activities for 2017 was $140,000. Instructions Compute the following liquidity measures for 2017: 1. Current ratio 2. Accounts receivable turnover 3. Inventory turnover

When the disposal of a significant segment occurs, the income statement should report both income from continuing operations and income (loss) from discontinued operations.

The following items were taken from the financial statements of Mint, Inc., over a three-year period: Instructions Compute the following for each of the above time periods. a. The amount and percentage change from 2016 to 2017. b. The amount and percentage change from 2017 to 2018. ,

Inventory turnover measures the number of times on average the inventory was sold during the period.

Dos Amugus Company has income from continuing operations of $621,000 (after tax) for the year ended December 31, 2017. It also has the following items (before considering income taxes): (1) An unrealized loss of $120,000 available-for-sale-securities. (2) A gain of $60,000 on the discontinuance of a major component. (3) A cumulative effect of a change in accounting principle that resulted in an increase in prior years' depreciation of $50,000. Assume all items are subject to income taxes at a 30% tax rate. Instructions Prepare a statement of comprehensive income, beginning with income from continuing operations.

Common size analysis expresses each item in a financial statement as a percent of a base amount.