Exam 12: Financial Statement Analysis

Knowing the dollar amount of change from year-to-year in an account is less relevant than knowing the percentage change.

Assume that Jeanie Industries' inventory was $20,000 in 2012 and $19,000 in 2011 and cost of goods sold for 2012 was $585,000. In addition, assume that account receivables were $30,000 in 2012 and $20,000 in 2011 and credit sales were $750,000. Based on that information and an accounts payable turnover rate of 25, calculate the inventory turnover rate, accounts receivable turnover rate and the cash conversion cycle for Jeanie Industries.

The debt ratio is the relationship between total __________ and total __________.

A comparison of the amounts for the same item in the financial statements of two or more periods is called __________ analysis.

The quick ratio is the most widely used liquidity ratio.

A common-size comparative statement shows:

For vertical analysis purposes, the base item on the balance sheet is __________.

If total assets are $6,000, what is the common-size figure of cash, assuming that cash has a balance of $2,400?

Topiary's Unlimited has a cost of goods sold of $1,600,000. The beginning merchandise inventory was $195,000 and the ending merchandise inventory is $205,000. Topiary's merchandise inventory turnover ratio is __________.

Working capital is defined as total assets divided by total liabilities.

Financial statement analysis indicates only that a problem may exist and offers clues as to what the problem might be.

What is the rate of return on equity if net income is $22,700; preferred dividends are $3,000; sales are $100,000; and average common shareholders' equity is $86,000?

If days in receivables is 35 days, this means that from the date of:

What is retrospective application?

Amanda's has a cost of goods sold of $1,900,000. The beginning and ending merchandise inventories are $133,000 and $125,000, respectively. Amanda's merchandise inventory turnover ratio is __________.

The net income for the year ended was $300,000. Common shareholders' equity at the end of the year was $1,600,000 and $1,400,000 at the beginning of the year. The return on common shareholders' equity would be __________.

In a common-size income statement, selling expenses are 55%. This means that they are 55% of:

Isaiah Company has net income of $720,000, beginning total assets of $2,100,000, and ending total assets of $2,300,000. Isaiah's return on total assets is __________.

In order to do a complete financial analysis, you should have at least five years of figures available for comparison.

The current ratio for a company with current assets of $70,000, quick assets of $30,000, total assets of $150,000, current liabilities of $50,000, and net sales of $80,000 would be __________.