Exam 18: Financial Statement Analysis

Earnings per share is calculated

In analyzing and interpreting financial statement information three major characteristics are generally evaluated: (1)____________ (2)_____________ and (3)_____________.

Expressing each item within a financial statement as a percentage of a base amount is called ______________ analysis.

The following financial statement information is available for Long Corporation: The times interest earned for 2017 is

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. Assets Cash and short-term investments \ 40,500 Accounts receivable (net) 30,000 Inventory 27,000 Property, plant and equipment 215,000 Total Assets \ 312,500 Liabilities and Stockholders' Equity Current liabilities \ 60,000 Long-term liabilities 75,000 Stockholders' equity—common 177,500 Total Liabilities and Stockholders' Equity \ 312,500 Income Statement Sales \ 90,000 Cost of goods sold 40,000 Gross profit 50,000 Operating expenses 25,000 Net income \ 25,000 Number of shares of common stock 5,000 Market price of common stock \ 22 Dividends per share 1,00 What is the return on assets for Rural?

A liquidity ratio measures the

What is meant by trading on the equity? (b) How would you determine the profitability of trading on the equity?

For each of the ratios listed below indicate by the appropriate code letter whether it is a liquidity ratio (L) a profitability ratio (P) or a solvency ratio (S).

Times interest earned is also called the

Operating data for Lewis Corporation are presented below. 2017 Net sales \ 500,000 Cost of goods sold 310,000 Operating expenses 120,000 Net income 70,000 Instructions Prepare a schedule showing a vertical analysis for 2017.

Comprehensive income would not include

The current ratio is a measure of all the ratios calculated for the current year.

Why is it important to report discontinued operations separately from income from continuing operations?

Using the following operating data for Complex Corporation illustrate horizontal analysis. 2017 2016 Net sales \ 350,000 \ 300,000 Cost of goods sold 240,000 160,000 Operating expenses 80,000 120,000 Net income 30,000 20,000

Shelly Company reported the following financial information: 12/31/17 12/31/16 Accounts receivable \ 340,000 \ 360,000 Net credit sales 2,450,000 2,420,000 Compute (a) the accounts receivable turnover and (b) the average collection period for 2017.

Proctor Corporation had beginning inventory $100000 cost of goods sold $750000 and ending inventory $150000. What was Proctor's inventory turnover?

Assume the following sales data for a company: 2017 \ 1,050,000 2016 950,000 2015 800,000 2014 650,000 If 2014 is the base year what is the percentage increase in sales from 2014 to 2016?

Assume the following sales data for a company: 2017 \ 945,000 2016 877,500 2015 675,000 If 2015 is the base year what is the percentage increase in sales from 2015 to 2016?

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 \ 305,000 Liabilities and Stockholders' Equity Current liabilities \ 50,000 Long-term liabilities 95,000 Stockholders' equity-common Total Liabilities and Stockholders' Equity Income Statement Sales 120,000 Cost of goods sold Gross profit 54,000 Operating expenses Net income Number of shares of common stock 6,000 Market price of common stock \ 20 Dividends per share .50 What is the current ratio for Ortiz?

In vertical analysis the base amount for each income statement item is