Exam 12: Financial Statement Analysis

Everyday business activities are reported in the __________ section.

The lower the times interest earned ratio, the more likely:

The revenue of Rick's Motorcycles for the years 2009, 2010, and 2011 is $75,000, $100,000 ,and $200,000, respectively. If 2009 is the base year, the trend percentage for 2010 is:

A solvency ratio is defined as the ability for a company to meet long-term obligations or take on more debt.

Asset management ratios measure how efficiently a company utilizes its operating assets.

A(n) ________ is a distinguishable part of a business that is subject to a different set of risks and returns than other parts of the business.

If Rick's net sales increased from $40,000 to $80,000 and its operating expenses increased from $30,000 to $50,000, then, using vertical analysis based on net sales, what percentages would show for operating expenses for the two periods (to the nearest tenth of a percent)?

A vertical analysis differs from a horizontal analysis in that an item is selected as the base amount and all other items are computed as a percentage of the base amount.

What was the percentage of change in accounts receivable if the balance was $80,000 in 2009 and $60,000 in 2010? What form of analysis is this called?

By using only percentages in common-size statements, the statements emphasize dollar value bias.

Rick's Sporting Goods reported $23,400 in A/R in 2010 and $25,100 in A/R in 2009. The percentage change for A/R from 2009 to 2010 was __________.

The last section of an income statement report (before earnings per share data) is __________.

With a beginning accounts receivable balance of $80,000; an ending accounts receivable balance of $120,000; and net credit sales of $900,000; the accounts receivable turnover is __________.

The three ways to analyze financial statements are by using horizontal, vertical, and ratio analysis.

The sales of Mark's Online for the years 2009, 2010, and 2011 are $40,000, $60,000, and $80,000, respectively. If 2009 is the base year, the trend percentage for 2010 is:

Which section of the income statement does NOT report net of income taxes or net of income tax savings?

Casey Company reported the following for 2010: Net sales: $345,000 Net income: $29,600 Market price per common share: $35.50 Preferred dividends paid: $2,300 Number of common shares outstanding: 125,000 What are the earnings per share for Casey Company (to the nearest cent)?

Sobey's would probably benchmark with other:

Which of the following would NOT be a red flag in a financial statement analysis?

Horizontal analysis is only done on the income statement.