Exam 12: Financial Analysis: The Big Picture

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. Assets Cash and short-term investments \ 40,000 Accounts receivable (net) 25,000 Inventory 20,000 Property, plant and equipment 210,000 Total Assets \ 295,000 Liabilities and Stockholders' Equity Current liabilities \ 60,000 Long-term liabilities 85,000 Stockholders' equity-Common 150,000 Total Liabilities and Stockholders' Equity \ 295,000 Income Statement Sales revenue \ 85,000 Cost of goods sold 45,000 Gross margin 40,000 Operating expenses 20,000 Net income \ 20,000 Number of shares of common stock 6,000 Market price of common stock \ 20 Dividends per share on common stock 0.90 Cash provided by operations \ 30,000 What is the price earnings ratio for this company?

Other comprehensive income includes all changes in stockholder's equity during a period including those changes resulting from investments by stockholder's.

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. Assets Cash and short-term investments \ 40,000 Accounts receivable (net) 25,000 Inventory 20,000 Property, plant and equipment 210,000 Total Assets \ 295,000 Liabilities and Stockholders' Equity Current liabilities \ 60,000 Long-term liabilities 85,000 Stockholders' equity-Common 150,000 Total Liabilities and Stockholders' Equity \ 295,000 Income Statement Sales revenue \ 85,000 Cost of goods sold 45,000 Gross margin 40,000 Operating expenses 20,000 Net income \ 20,000 Number of shares of common stock 6,000 Market price of common stock \ 20 Dividends per share on common stock 0.90 Cash provided by operations \ 30,000 What is the profit margin for this company?

The current ratio is one of the most utilized measures of profitability.

Which of the following would be considered an "Other comprehensive income" item?

The asset turnover is

Horizontal analysis is a technique for evaluating financial statement data

A successful grocery store would probably have

BVI Corporation had net income of $1,600,000 and paid dividends to common stockholders of $320,000 in 2017. The weighted average number of shares outstanding in 2017 was 500,000 shares. BVI Corporation's common stock is selling for $50 per share on the NASDAQ. BVI Corporation's payout ratio for 2017 is

In performing a vertical analysis, the base for sales returns and allowances is

In a common size income statement, net sales are represented by 100%.

Stellar, Inc. decided on January 1 to discontinue its telescope manufacturing division. On July 1, the division's assets with a book value of $1,260,000 are sold for $900,000. Operating income from January 1 to June 30 for the division amounted to $195,000. Ignoring income taxes, what total amount should be reported on Stellar's income statement for the current year under the caption, Discontinued Operations?

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

Comparisons of data within a company are an example of the following comparative basis

Both profit margin and asset turnover affect a company's return on assets.

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. Assets Cash and short-term investments \ 45,000 Accounts receivable (net) 30,000 Inventory 25,000 Property, plant and equipment 210,000 Total Assets \ 310,000 Liabilities and Stockholders' Equity Current liabilities \ 60,000 Long-term liabilities 95,000 Stockholders' equity-common 155,000 Total Liabilities and Stockholders' Equity \ 310,000 Income Statement Sales revenue \ 116,000 Cost of goods sold 66,000 Gross margin 50,000 Operating expenses \ 30,000 Net income \ 20,000 Number of shares of common stock 6,000 Market price of common stock \ 20 Dividends per share on common stock .50 Cash provided by operations \ 35,000 What is the inventory turnover for this company?

Distinguishing normal levels of income from irregular items is of interest for the $\underline{\text { FASB }} \quad \underline{\text { IASB }}$ a. $\text { no\quad\quad\quad no }$ b. $\text { no\quad\quad\quad yes }$ c. $\text { yes\quad\quad\quad no }$ d. $\text { yes } \quad\quad \text { yes }$

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 performing a vertical analysis, the base for prepaid expenses is

In vertical analysis, the base amount for salaries and wages expense is generally