Exam 14: Managerial Accounting

Vertical analysis is a technique which expresses each item within a financial statement

When performing vertical analysis, the base amount for administrative expense is generally

Another name for trend analysis is horizontal analysis.

The following financial statement information is available for Buil Corporation: 2017 2016 Inventory \ 44,000 \ 43,000 Current assets 80,000 106,000 Total assets 432,000 358,000 Current liabilities 25,000 36,000 Total liabilities 102,000 88,000 The current ratio for 2017 is

North Company reports the following amounts for 2017: Net income \ 160,000 Average stockholders' equity 2,000,000 Preferred dividends 45,000 Par value preferred stock 250,000 The 2017 rate of return on common stockholders' equity is:

Variations among companies in the application of generally accepted accounting principles may reduce quality of earnings.

Each of the following is included in computing the acid-test ratio except

If the average collection period is 60 days, what is the accounts receivable turnover?

A loss from the disposal of a significant component of a business should be reported separately in the income statement:

Meaningful analysis of financial statements will include either horizontal or vertical analysis, but not both.

Which of the following is not a profitability ratio?

The following information is available for Oakland Company: 2017 2016 Accounts receivable \ 360,000 \ 400,000 Inventory 340,000 400,000 Net credit sales 2,470,000 1,400,000 Cost of goods sold 1,850,000 1,060,000 Net income 300,000 170,000 The inventory turnover ratio for 2017 is

A liquidity ratio measures the

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) 30,000 Inventory 20,000 Property, plant and equipment 210,000 Total Assets \3 05,000 Liabilities and Stockholders' Equity Current liabilities \ 50,000 Long-term liabilities 95,000 Stockholders' equity-common 160,000 Total Liabilities and Stockholders' Equity \3 05,000 Income Statement Sales \ 120,000 Cost of goods sold 66,000 Gross profit 54,000 Operating expenses 30,000 Net income \2 4,000 Number of shares of common stock 6,000 Market price of common stock \2 0 Dividends per share .50 What is the current ratio for Ortiz?

Proctor Corporation had beginning inventory $100,000, cost of goods sold $750,000, and ending inventory $150,000.What was Proctor's inventory turnover?

A company has a accounts receivable turnover of 10 times.The average accounts receivable during the period are $400,000.What is the amount of net credit sales for the period?

Using borrowed money to increase the rate of return on common stockholders' equity is called "trading on the equity."

In analyzing financial statements, horizontal analysis is a

The following information is available for Oakland Company: 2017 2016 Accounts receivable \ 430,000 \ 460,000 Inventory 280,000 320,000 Net credit sales 2,670,000 1,600,000 Cost of goods sold 1,860,000 1,060,000 Net income 300,000 170,000 The accounts receivable turnover ratio for 2017 is

A weakness of the current ratio is