Exam 9: Managerial Accounting

Which of the following income statement figures would probably be the best indicator of a company's future performance?

Both profit margin and asset turnover affect a company's return on assets.

A common measure of profitability is the

Long-term creditors are usually most interested in evaluating

Companies report most changes in accounting principle currently.

Which measure(s) is(are) useful in evaluating the efficiency in managing inventories? 1. Inventory turnover 2. Days in inventory

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 \ 5,000 Accounts receivable (net) 30,000 Inventory 25,000 Property, plant and equipment 210,000 Total Assets \ 310,000 Liabilities and Stockholders' Equity Current liabilities \ 60,000 Long-term liabilities 95,000 Stockholders' equity-common 155,000 Total Liabilities and Stockholders' Equity \ 310,000 Income Statement Sales revenue \ 116,000 Grost of goods sold 66,000 gross ,argin 50,000 Operating expenses 30,000 Net income \ 20,000 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 \ 35,000 What is the inventory turnover for this company?

Other comprehensive income is reported on the statement of comprehensive income immediately

In a common size financial statement which of the following is given a percentage of 100 percent?

Tito Corporation had net income of $2000000 and paid dividends to common stockholders of $300000 in 2021.The weighted average number of shares outstanding in 2021 was 400000 shares.Tito Corporation's common stock is selling for $50 per share on the NASDAQ.Tito Corporation's payout ratio for 2021 is

Which of the following items appears on the income statement before income before income taxes?

If Year 1 equals $750 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

The current ratio is

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

A high accounts receivable turnover indicates

In horizontal or trend analysis each item is expressed as a(n)

Junebag Corporation reported net income $24000; net sales $400000; and average assets $600000 for 2021.What is the 2021 profit margin?

Ed's Drive-In had $175000 of current assets and $80000 of current liabilities before borrowing $60000 from the bank with a 3-month note payable.What effect did the borrowing transaction have on Ed's Drive-In's current ratio?

Return on assets is most closely related to

Vertical analysis is useful in making comparisons of companies of different sizes.