Exam 14: Managerial Accounting

Intracompany comparisons of the same financial statement items can often detect changes in financial relationships and significant trends.

The days in inventory is computed by multiplying inventory turnover by 365.

Trading on the equity (leverage) refers to the

In common size analysis,

Horizontal, vertical, and circular analyses are the most common tools of financial statement analysis.

Blitzen Corporation had net income of $500,000 and paid dividends to common stockholders of $40,000 in 2017.The weighted average number of shares outstanding in 2017 was 60,000 shares.Blitzen Corporation's common stock is selling for $50 per share on the New York Stock Exchange.Blitzen Corporation's payout ratio for 2017 is

In reporting discontinued operations, the income statement should show in a special section 1. gains on the disposal of a discontinued component. 2. losses on the disposal of a discontinued component

From a creditor's point of view, the higher the total debt to total assets ratio, the lower the risk that the company may be unable to pay its obligations.

A company has an average inventory on hand of $60,000 and the days in inventory is 73 days.What is the cost of goods sold?

The rate of return on total assets will be greater than the rate of return on common stockholders' equity if the company has been successful in trading on the equity at a gain.

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 \1 4,000 Number of shares of common stock 6,000 Market price of common stock \2 0 Dividends per share .50 What is the accounts receivable turnover for Ortiz?

The acid-test ratio is also known as the

Profit margin is calculated by dividing

A measure of the percentage of each dollar of sales that results in net income 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 310,000 Total Assets \4 00,000 Liabilities and Stockholders' Equity Current liabilities \ 50,000 Long-term liabilities 90,000 Stockholders' equity-common 260,000 Total Liabilities and Stockholders' Equity \4 00,000 Income Statement Sales \ 300,000 Cost of goods sold 66,000 Gross profit \2 34,000 Operating expenses 27,000 Net income \2 07,000 Number of shares of common stock 6,000 Market price of common stock \ 20 Dividends per share .50 What is the profit margin for Ortiz?

Profitability ratios measure the ability of the enterprise to survive over a long period of time.

The following information pertains to Rural Company.Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Income Statement Sales \ 90,000 Cost of goods sold 44,000 Gross profit 46,000 Operating expenses 30,000 Net income \1 6,000 Number of shares of common stock 5,000 Market price of common stock \ 22 Dividends per share 1.00 What is the return on common stockholders' equity for Rural?

The formula for horizontal analysis of changes since the base period is the current year amount

In vertical analysis, the base amount in an income statement is usually net sales.

Turnbull Department Store had net credit sales of $18,000,000 and cost of goods sold of $15,000,000 for the year.The average inventory for the year amounted to $2,500,000.Inventory turnover for the year is