Exam 14: Managerial Accounting

In 2017 Rome Corporation reported net income $190,000, interest expense $60,000, and income tax expense $40,000.Rome's times interest earned was:

Nord Company had $375,000 of current assets and $150,000 of current liabilities before borrowing $70,000 from the bank with a 3-month note payable.What effect did the borrowing transaction have on Nord Company's current ratio?

Swiss Clothing Store had a balance in the Accounts Receivable account of $920,000 at the beginning of the year and a balance of $980,000 at the end of the year.Net credit sales during the year amounted to $6,650,000.The average collection period of the receivables in terms of days was

Vertical analysis is a more sophisticated analytical tool than horizontal analysis.

Which of the following would be considered an Other Comprehensive Income item?

The following amounts were taken from the financial statements of Leaf Company: 2017 2016 Total assets \ 800,000 \ 1,000,000 Net sales 720,000 650,000 Gross profit 352,000 320,000 Net income 150,000 117,000 Weighted average number of common shares outstanding 50,000 90,000 Market price of common stock \ 64,50 \ 39 The price-earnings ratio for 2017 is

Ratios are used as tools in financial analysis

A solvency ratio measures the income or operating success of an enterprise for a given period of time.

The acid-test ratio

Horizontal analysis evaluates financial statement data

The current ratio is

The current assets of Myers Company are $250,000.The current liabilities are $100,000.The current ratio expressed as a proportion is

A stockholder is interested in the ability of a firm to

Ale Corporation had net income of $240,000 and paid dividends to common stockholders of $40,000 in 2017.The weighted average number of shares outstanding in 2017 was 60,000 shares.Ale Corporation's common stock is selling for $76 per share on the New York Stock Exchange.Ale Corporation's price-earnings ratio is

The following information pertains to Ortiz 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) 25,000 Inventory 20,000 Property, plant and equipment 270,000 Total Assets \3 60,000 Liabilities and Stockholders' Equity Current liabilities \ 50,000 Long-term liabilities 90,000 Stockholders' equity-common 220,000 Total Liabilities and Stockholders' Equity \3 60,000 Income Statement Sales \ 150,000 Cost of goods sold 66,000 Gross profit 84,000 Operating expenses 29,000 Net income \5 5,000 Number of shares of common stock 6,000 Market price of common stock \2 0 Dividends per share .50 What is the return on common stockholders' equity for Ortiz?

In performing a vertical analysis, the base for cost of goods sold is

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

Earnings per share is calculated

Measures of a company's liquidity are concerned with the frequency and amounts of dividend payments.

If equal amounts are added to the numerator and the denominator of the current ratio, the ratio will always