Exam 14: Financial Statement Analysis

Blitzen Corporation had net income of $200,000 and paid dividends to common stockholders of $50,000 in 2020. The weighted average number of shares outstanding in 2020 was 40,000 shares. Blitzen Corporation's common stock is selling for $35 per share on the New York Stock Exchange. Blitzen Corporation's price-earnings ratio is

Another name for trend analysis is horizontal 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 20,000 Property, plant and equipment 210,000 Total Assets \ 300,000 Liabilities and Stockholders' Equity Current liabilities \ 50,000 Long-term liabilities 90,000 Stockholders' equity?Common 160,000 Total Liabilities and Stockholders' Equity \ 300,000 Income Statement Sales \ 100,000 Cost of goods sold 55,000 Gross profit 45,000 Operating expenses 15,000 Net income \ 30,000 Number of shares of common stock 6,000 Market price of common stock \ 30 Dividends per share .50 What is the price-earnings ratio for Ortiz?

Long-term creditors are usually most interested in evaluating

Profit margin is calculated by dividing

In vertical analysis, the base amount in an income statement is usually net sales.

Comprehensive income would not include

North Company reports the following amounts for 2020: Net income 160,000 Average stockholders' equity 2,000,000 Preferred dividends 45,000 Parvalue preferred stock 250,000 The 2020 rate of return on common stockholders' equity is:

If equal amounts are added to the numerator and the denominator of the current ratio, the ratio will always

Nord Company had $375,000 of current assets and $150,000 of current liabilities before borrowing $70,000 from the bank with a 3-month note payable. What effect did the borrowing transaction have on Nord Company's current ratio?

Earnings per share is calculated

Pro forma income usually excludes items that the company thinks are unusual or nonrecurring.

Assume the following sales data for a company: 2020 \ 1,050,000 2019 950,000 2018 800,000 2017 650,000 If 2017 is the base year, what is the percentage increase in sales from 2017 to 2019?

Short-term creditors are usually most interested in evaluating

In analyzing financial statements, horizontal analysis is a

Stockholders are most interested in evaluating

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

Which one of the following is not a characteristic generally evaluated in analyzing financial statements?

In performing a vertical analysis, the base for cost of goods sold 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?