Exam 14: Financial Statement Analysis

A supplier to a company would be most interested in the company's

Ale Corporation had net income of $240,000 and paid dividends to common stockholders of $40,000 in 2020. The weighted average number of shares outstanding in 2020 was 60,000 shares. Ale Corporation's common stock is selling for $76 per share on the New York Stock Exchange. Ale Corporation's price-earnings ratio is

The discontinued operations section of the income statement refers to

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. The average number of days in inventory during the year was

Which one of the following is primarily interested in the liquidity of a company?

Dean Corporation reported net income $58,000, net sales $500,000, and average assets $800,000 for 2020. The 2020 profit margin was:

The following financial statement information is available for Long Corporation: 2020 2019 Net income \ 115,000 \ 80,000 Income tax expense 30,000 29,000 Interest expense 18,000 14,000 Dividends paid to preferred stockholders 22,000 20,000 Dividends paid to preferred stockholders 15,000 10,000 The times interest earned for 2020 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 \ 40,000 Accounts receivable (net) 30,000 Inventory 25,000 Property, plant and equipment 215,000 Total Assets \ 310,000 Liabilities and Stockholders' Equity Current liabilities \ 60,000 Long-term liabilities 75,000 Stockholders' equity-common 175,000 Total Liabilities and Stockholders' Equity \ 310,000 Income Statement Sales 130,000 Cost of goods sold 45,000 Gross profit 85,000 Operating expenses 25,000 Net income \ 60,000 Number of shares of common stock 5,000 Market price of common stock \ 22 Dividends per share 1.00 What is the profit margin for Rural?

The following amounts were taken from the financial statements of Leaf Company: 2020 2019 Total assets \ 800,000 \ 1,000,000 Net sales 720,000 650,000 Gross profit 352,000 320,000 Net income 150,000 117,000 Weighted average number of common shares outstanding 50,000 90,000 Market price of common stock \ 64,50 \ 39 The price-earnings ratio for 2020 is

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?

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

In common size analysis,

Saira, Inc. has the following income statement (in millions): SAIRA, INC. Income Statement For the Year Ended December 31, 2020 Net Sales \ 300 Cost of Goods Sold 180 Gross Profit 120 Operating Expenses 45 Net Income \7 5 Using vertical analysis, what percentage is assigned to Net Income?

A current ratio of 1.2 to 1 indicates that a company's current assets exceed its current liabilities.

In performing a vertical analysis, the base for sales revenues on the income statement is

Quasar Corporation had net income of $300,000 and paid dividends to common stockholders of $40,000 in 2020. The weighted average number of shares outstanding in 2020 was 60,000 shares. Quasar Corporation's common stock is selling for $35 per share on the New York Stock Exchange. Quasar Corporation's price-earnings ratio is

Calculating financial ratios is a financial reporting requirement under generally accepted accounting principles.

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 current ratio may also be referred to as the

Comparative balance sheets are usually prepared for