Exam 14: Financial Statement Analysis

An aircraft company would most likely have

Net income does not appear in the numerator of the

Which one of the following ratios would not likely be used by a short-term creditor in evaluating whether to sell on credit to a company?

Which one of the following would not be considered a liquidity ratio?

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

Meaningful analysis of financial statements will include either horizontal or vertical analysis, but not both.

The following financial statement information is available for Buil Corporation: 2020 2019 Inventory \ 44,000 \ 43,000 Current assets 80,000 106,000 Total assets 432,000 358,000 Current liabilities 25,000 36,000 Total liabilities 102,000 88,000 The current ratio for 2020 is

Comparisons of company data with industry averages can provide some insight into the company's relative position in the industry.

Measures of a company's liquidity are concerned with the frequency and amounts of dividend payments.

The disposal of a significant component of a business is called

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 \ 400,000 Liabilities and Stockholders' Equity Current liabilities \ 50,000 Long-term liabilities 90,000 Stockholders' equity\_common 260,000 Total Liabilities and Stockholders' Equity \ 400,000 Income Statement Sales \ 300,000 Cost of goods sold 66,000 Gross profit 234,000 Operating expenses 27,000 Net income \ 207,000 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?

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 \ 95,000 Cost of goods sold 45,000 Gross profit 50,000 Operating expenses 15,000 Net income \ 35,000 Number of shares of common stock 5,000 Market price of common stock \ 21 Dividends per share 1.00 What is the price-earnings ratio for Rural?

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

In performing a vertical analysis, the base for prepaid expenses is

Each of the following is a liquidity ratio except the

The current ratio is

Ratios that measure the short-term ability of the company to pay its maturing obligations are

Horizontal, vertical, and circular analyses are the most common tools of financial statement 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) 25,000 Inventory 12,000 Property, plant and equipment 210,000 Total Assets \ 292,000 Liabilities and Stockholders' Equity Current liabilities \ 50,000 Long-term liabilities 90,000 Stockholders' equity?common 152,000 Total Liabilities and Stockholders' Equity \ 292,000 Income Statement Sales \ 120,000 Cost of goods sold 66,000 Gross profit 54,000 Operating expenses 30,000 Net income \ 24,000 Number of shares of common stock 6,000 Market price of common stock \ 20 Dividends per share .50 What is the inventory turnover for Ortiz?

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