Exam 15: Financial Statement Analysis

The balance sheets at the end of each of the first two years of operations indicate the following: -If net income is $150,000 and interest expense is $20,000 for Year 2, what is the rate earned on stockholders' equity for Year 2?

What is the rate earned on total assets for this company? -The following information pertains to Dallas Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. What is the rate earned on stockholders' equity?

If a firm has a quick ratio of 1, the subsequent payment of an account payable will cause the ratio to increase.

If a company has issued only one class of stock, the earnings per share are determined by dividing net income plus interest expense by the number of shares outstanding.

The following data are available for Martin Solutions, Inc. 1) Determine for each year: a) The inventory turnover b) The number of days' sales in inventory Round intermediate calculation to the nearest whole number and your final answer to one decimal place). 2) What conclusions can be drawn from these data concerning the inventories?

Based on the above data, what is the amount of quick assets?

Which of the following items should be classified as an extraordinary item on an income statement?

The auditor's report is where the auditor certifies that the financial statements are correct and accurate.

The numerator of the rate earned on total assets ratio is

Current position analysis measures a company's ability to pay its current liabilities.

The relationship of each asset item as a percent of total assets is an example of vertical analysis.

Match each definition that follows with the term a-h) it defines. -an analysis of a company's ability to pay its current liabilities

Match each ratio that follows to its use items a-h). Items may be used more than once. -ratio of sales to assets

Match each definition that follows with the term a-h) it defines. -a percentage analysis of increases and decreases in related items on comparative financial statements

The particular analytical measures chosen to analyze a company may be influenced by all of the following except

Cash and accounts receivable for Adams Company are provided below: Current Year Prior Year Cash $70,000 $50,000 Accounts receivable net)70,400 80,000 What is the amount and percentage of increase or decrease that would be shown with horizontal analysis?

Which of the following items appear on the corporate income statement before income from continuing operations?

Revenue and expense data for Bluestem Company are as follows: a) Prepare a comparative income statement, with vertical analysis, stating each item for both years as a percent of sales. b) Comment upon significant changes disclosed by the comparative income statement. Round percentages to one decimal place.

The following items are reported on a company's balance sheet: Cash $400,000 Marketable securities 50,000 Accounts receivable 150,000 Inventory 200,000 Accounts payable 250,000 Determine the a) current ratio, and b) quick ratio. Round your answer to one decimal place.

The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. -What is the price earnings ratio for Diane Company?