Exam 12: Financial Statement Analysis

The ratio that measures the productivity of total assets used is the __________.

What would an acid test (quick ratio) of 0.75 indicate?

The formula "net income minus preferred dividends divided by average common shareholders' equity" yields:

Rick's net sales decreased from $90,000 in year 1 to $45,000 in year 2 and its cost of goods sold decreased from $30,000 in year 1 to $20,000 in year 2. Using vertical analysis based on sales , what percentages would show for the decreases in cost of goods sold for the two periods (rounded to nearest tenth of a percent)? Using horizontal analysis, what would be the percentage change for sales and cost of goods sold?

Common-size statements are useful when comparing a company's performance against that of a similar, but not necessarily the same-sized, company.

If cash is $4,450 in 2010 and $3,670 in 2009, what is the percentage increase or decrease from 2009 to 2010?

From the following, complete the common-size income statement for Isaiah's Sporting Goods using net sales as the base. (Round to nearest tenth of a percent.)

For vertical analysis purposes, the base item on the income statement is __________.

Which of the ratios helps to evaluate how well a company is earning profit for the common shareholders?

Michele Company reported the following for 2010: Earnings/share of $19.23 Market price per common share: $67.00 Number of common shares outstanding: 75,000 Net income: $54,000 Preferred dividends paid: $2,200 Dividends/share: $6.73 What is the dividend yield for Michele Company (to the nearest tenth of a percent)?

Which of the following would be a red flag in a financial statement analysis?

Inventory and prepaid expenses are NOT included in the computation of the __________ ratio.