Exam 16: How to Read, Analyze, and Interpret Financial Reports

The asset turnover is gross sales divided by total assets.

Complete the following ratios: Current assets = $13,000 Inventory = $4,400 Current liabilities = $10,000 Net income = $7,700 Net sales = $24,400 A. Profit margin on sales (round to nearest tenth percent) B. Acid test

As the accountant of Roe Hairdresser, you have been asked to prepare an income statement from the following data for the month ended June 2012:

Net income is equal to gross profit minus operating expenses.

Assets, liabilities, capital, and revenues are listed on the balance sheet.

Given gross sales of $40,000 and sales returns and allowances of $6,000, what are the net sales?

Complete the trend analysis for sales for year 3 (Round to nearest tenth percent):

Income statements are prepared only once a year.

Assets that last longer than one year are called plant and equipment.

Cash is recorded on the income statement.

Mel King has asked you to prepare a classified balance sheet for Pad Co. as of December 31, 2012. Ending merchandise inventory was $1,800:

The asset turnover of Ryan Company is 7.2. The total assets of Ryan are $88,000. Ryan's net sales were:

Vertical analysis need not be done only on comparative reports since calculations were within each period of time.

Vertical analysis cannot be done on a comparative statement.

Al Flynn has gathered the following information. Could you help Al calculate his gross profit?

Debt management ratios show a company how well its assets are managed.

From the following, prepare a balance sheet for Roe Co. as of December 31, 2016.

Complete the current ratio for the following: Total current assets = $12,000; current liabilities = $10,000

Complete the following average day's collection: Account receivables = $66,000; net sales = $360,000 (assume 360 days)

In the acid test ratio, inventory and prepaid expenses are not excluded.