Exam 18: Financial Statement Analysis

The lower the ______________ to ______________ ratio the more equity "buffer" there is available to the creditors.

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

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

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

A ratio can be expressed as a percentage a rate or a proportion.

The discontinued operations section of the income statement refers to

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

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

Assume the following cost of goods sold data for a company: 2017 \ 1,704,000 2016 1,400,000 2015 1,200,000 If 2015 is the base year what is the percentage increase in cost of goods sold from 2015 to 2017?

Long-term creditors are usually most interested in evaluating

Saira Inc. has the following income statement (in millions): SAIRA, INC Income Statement For the Year Ended December 31,2017 Net Sales \ 300 Cost of Goods Sold 180 Gross Profit 120 Operating Expenses 45 Net Income \ 75 Using vertical analysis what percentage is assigned to Net Income?

In ratio analysis the ratios are never expressed as a

Stanton Corporation had net income for the year of $200000 and a profit margin of 20%. If total average assets were $400000 the asset turnover ratio was ____________ times.

The comparative condensed balance sheets of Able Corporation are presented below. ABLE CORPORATION Comparative Condensed Balance Sheets December 31 Current assets \ 72,000 \ 80,000 Property, plant, and equipment (net) 95,400 90,000 Intangibles 33,600 40,000 Total assets Liabilities and stockholders' equity Current liabilities \ 40,320 \ 8,000 Long-term liabilities 142,500 150,000 Stockholders' equity 18,180 12,000 Total liabilities and stockholders' equity \ 201,000 \ 210,000 Instructions (a) Prepare a horizontal analysis of the balance sheet data for Able Corporation using 2016 as a base. (b) Prepare a vertical analysis of the balance sheet data for Able Corporation in columnar form for 2017.

The balance sheet for Tyde Corporation at the end of the current year indicates the following: Bonds payable, 6 \% \4 ,000,000 5\% Preferred stock, \1 00 par 1,000,000 Common stock \ 10 par 2,000,000 Income before income taxes was $480000 and income taxes expense for the current year amounted to $144000. Cash dividends paid on common stock were $300000 and the common stock was selling for $22.88 per share at the end of the year. There were no ownership changes during the year. Instructions Determine each of the following: (a) Times that bond interest was earned. (b) Earnings per share for common stock. (c) Price-earnings ratio.

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 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 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

What do the following classes of ratios measure? (a) Liquidity ratios. (b) Profitability ratios. (c) Solvency ratios.

The order of presentation of items that may appear on the statement of comprehensive income is

Trading on the equity (leverage) refers to the