Exam 13: Financial Analysis: The Big Picture

Which one of the following would be classified as an extraordinary item?

In a common size balance sheet, the 100 percent figure is

An event or transaction should be classified as an extraordinary item if it is unusual in nature or if it occurs infrequently.

The following information pertains to Blue Flower 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 15,000 Property, plant and equipment 210,000 Total Assets \ 300,000 Liabilities and Stockholders' Equity Current liabilities \ 60,000 Long-term liabilities 90,000 Stockholders' equity-common 150,000 Total Liabilities and Stockholders' Equity \3 00,000 Income Statement Sales revenue \ 121,000 Cost of goods sold 66,000 Gross margin 55,000 Operating expenses 30,000 Net income \ 25,000 Number of shares of common stock 6,000 Market price of common stock \ 20 Dividends per share on common stock .50 Cash provided by operations \ 40,000 What is the current cash debt coverage ratio for this company?

When preparing an income statement, which of the following is the proper order for income statement components?

Comprehensive income includes all changes in stockholders' equity during a period except those resulting from investments by stockholders and distributions to stockholders.

BVI Corporation had net income of $1,600,000 and paid dividends to common stockholders of $400,000 in 2014. The weighted average number of shares outstanding in 2014 was 500,000 shares. BVI Corporation's common stock is selling for $50 per share on the NASDAQ. BVI Corporation's price-earnings ratio is

Patchett Company reported income before taxes of $800,000 and an extraordinary loss of $200,000. Assume that the company's tax rate is 25%. What amounts will be reported on the income statement for income before irregular items and extraordinary items, respectively?

In vertical analysis, the base amount for salaries and wages expense is generally

Danner Corporation reported net sales of $600,000, $680,000, and $780,000 in the years 2013, 2014, and 2015, respectively. If 2013 is the base year, what percentage do 2015 sales represent of the base?

If Year 1 equals $800, Year 2 equals $840, and Year 3 equals $900, the percentage to be assigned for Year 3 in a trend analysis, assuming that Year 1 is the base year, is

Which of these is not a liquidity ratio?

Leverage and return on equity are closely related.

Salamagundi, Inc. has the following Income Statement (in millions): SALAMAGUNDI, INC. Income Statement For the Year Ended December 31, 2014 Net Sales \ 160 Cost of Goods Sold 90 Gross Profit 70 Operating Expenses \ 40 Net Income \ 30 Using vertical analysis, what percentage is assigned to net sales?

The best way to study the relationship of the components within a financial statement is to prepare

Assume the following sales data for a company: 2015 \ 910,000 2014 \ 770,000 2013 700,000 If 2013 is the base year, what is the percentage increase in sales from 2013 to 2014?

The following information pertains to Blue Flower 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 15,000 Property, plant and equipment 210,000 Total Assets \ 300,000 Liabilities and Stockholders' Equity Current liabilities \ 60,000 Long-term liabilities 90,000 Stockholders' equity-Common 150,000 Total Liabilities and Stockholders' Equity \ 300,000 Income Statement Sales revenue \ 121,000 Cost of goods sold 66,000 Gross margin 55,000 Operating expenses 30,000 Net income \ 25,000 Number of shares of common stock 6,000 Market price of common stock \ 20 Dividends per share on common stock 50 Cash provided by operations \ 40,000 What is the return on common stockholders' equity for this company?

In horizontal analysis, if an item has a negative amount in the base year, and a positive amount in the following year, no percentage change for that item can be computed.

Here is the income statement for Ginsberg, Inc. GINSBERG, INC. Income Statement For the Year Ended December 31, 2014 Sales revenue \ 400,000 Cost of goods sold 250,000 Gross profit 150,000 Expenses (including \ 12,000 interest and \ 22,000 income taxes) 100,000 Netincome \ 50,000 Additional information: 1. Common stock outstanding January 1, 2014, was 30,000 shares, and 40,000 shares were outstanding at December 31, 2014. 2. The market price of Gillman, Inc., stock was $15.86 in 2014. 3. Cash dividends of $16,000 were paid, $4,500 of which were to preferred stockholders. Instructions Compute the following measures for 2014. (a) Earnings per share. (b) Price-earnings ratio. (c) Payout ratio. (d) Times interest earned.

On January 1, 2014, Tri-State Industries had cash and common stock of $180,000. At that date the company had no other asset, liability or equity balances. On January 2, 2014, it purchased $160,000 of equity securities for cash that it classified as available-for-sale. It received cash dividends of $9,000 during the year on these securities. In addition, it had an unrealized holding gain on these securities of $24,000 net of tax. Based on this information, what is the amount of comprehensive income in 2014?