Exam 13: Financial Analysis: The Big Picture

Match the ratios with their formulas by entering the appropriate letter in the space provided. - $\frac{\text {Market price per share of stock }}{\text { Earningsper share}}$

The current ratio is a

The Holiday House had severe damage done to its Christmas inventory due to an escaped circus monkey rampaging through the store. The inventory loss was $150,000 before applicable taxes of $30,000. The Holiday House should record the loss as a(n)

Match the ratios with their formulas by entering the appropriate letter in the space provided. - $\frac{365 \text { days }}{\text {Inventory turnover }}$

In the vertical analysis of a balance sheet, the base for current liabilities is total liabilities.

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

A balance sheet that displays only component percentages is called a ________ balance sheet.

The asset turnover is

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

Which measure(s) is(are) an evaluation of a company's ability to pay current liabilities? 1) Current cash debt coverage ratio. 2) Current ratio.

The following amounts were taken from the financial statements of R.Dodd Company: 2014 2013 Current liabilities \ 1,280,000 \ 1,220,000 Long-term liabilities 1,800,000 1,600,000 Interest expense 100,000 50,000 Income tax expense 50,000 30,000 Net income 400,000 170,000 Net cash provided by operating activity 425,000 270,000 The cash debt coverage for 2014 is

The disposal of a significant component of a business is called

Which of the following items should be classified as an extraordinary item on an income statement?

Jones Corporation has issued common stock only. The company has been successful and has a gross profit rate of 20%. The information shown below was taken from the company's financial statements. Beginning inventory \ 482,000 Purchases 4,346,000 Ending inventory ? Average accounts receivable 700,000 Average common stockholders' equity 3,100,000 Sales revenue (all on credit) 5,600,000 Net income 341,000 Instructions Compute the following: (a) Accounts receivable turnover and the average number of days required to collect the accounts receivable. (b) The inventory turnover and the average days in inventory. (c) Return on common stockholders' equity.

A weakness of the current ratio is

Which one of the following would be considered a long-term solvency ratio?

Horizontal analysis of comparative financial statements includes the

Which of the following is not an irregular item on the income statement?

In a common size balance sheet, total assets are represented by 100%.

The two criteria necessary for an item to be classified as an extraordinary item are that the transaction or event must be (1) _______________ and (2) ________________.