Exam 18: Financial Statement Analysis

Profit margin is calculated by dividing

Quasar Corporation had net income of $210000 and paid dividends to common stockholders of $63000 in 2017. The weighted average number of shares outstanding in 2017 was 50000 shares. Quasar Corporation's common stock is selling for $30 per share on the New York Stock Exchange. Quasar Corporation's payout ratio for 2017 is

The following financial statement information is available for James Corporation: 2017 2016 Net sales \ 780,000 \ 697,000 Cost of goods sold 406,000 377,000 Net income 120,000 80,000 Tax expense 48,000 29,000 Interest expense 14,000 14,000 The profit margin ratio for 2017 is

A successful grocery store would probably have

In performing a vertical analysis the base for prepaid expenses is

Profitability ratios are frequently used as a basis for evaluating management's operating effectiveness.

A general rule to use in assessing the average collection period is that

Horizontal analysis (trend analysis) percentages for Staas Company's sales cost of goods sold and expenses are listed here. Sales 98.2\% 104.8\% 100.0\% Cost of goods sold 102.5 98.0 100.0 Expenses 108.6 96.4 100.0 Instructions Explain whether Staas' net income increased decreased or remained unchanged over the 3-year period.

Noble Company had net income of $175000 and net sales of $625000 in 2017. The company's total assets for 2013/2017 averaged $4000000. Its common stockholders' equity for the period averaged $2340000. Calculate (a) profit margin (b) return on assets and (c) return on common stockholders' equity.

Net sales are $8000000 beginning total assets are $2500000 and the asset turnover is 4.0 times. What is the ending total asset balance?

Ratios are used as tools in financial analysis

A stockholder is interested in the ability of a firm to

The following amounts were taken from the financial statements of Leaf Company: 2017 2016 Total assets \ 800,000 \ 880,000 Net sales 720,000 650,000 Gross profit 352,000 320,000 Net income 126,000 117,000 Weighted average number of common shares outstanding 90,000 90,000 Market price of common stock \ 35 \ 39 The profit margin ratio for 2017 is

The three basic tools of analysis are horizontal analysis vertical analysis and ratio analysis.

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) 40,000 Inventory 20,000 Property, plant and equipment 210,000 Total Assets \ 305,000 Liabilities and Stockholders' Equity Current liabilities \ 50,000 Long-term liabilities 95,000 Stockholders' equity—common 160,000 Total Liabilities and Stockholders' Equity \ 305,000 Income Statement Sales \ 110,000 Cost of goods sold 66,000 Gross profit 44,000 Operating expenses 30,000 Net income Number of shares of common stock 6,000 Market price of common stock \ 20 Dividends per share 50 What is the accounts receivable turnover for Ortiz?

For its fiscal year ending December 31 2017 Conner Corporation reported the following partial data Income before income taxes \ 1,200,000 Income tax expense (30 \% \times 950,000) 285,000 Income from continuing operations 915,000 Discontinued operations loss 250,000 Net income \ 665.000 The income tax rate is 30% on all items. Instructions Prepare a correct income statement beginning with income before income taxes.

Beacon Inc. disposes of an unprofitable segment of its business. The operation of the segment suffered a $350000 loss in the year of disposal. The loss on disposal of the segment was $150000. If the tax rate is 30% and income before income taxes was $2300000

What type of ratios best measure the short-term ability of the enterprise to pay its maturing obligations and to meet unexpected needs for cash?

The acid-test ratio is also known as the

Short-term creditors are usually most interested in evaluating