Exam 12: Financial Statement Analysis

Which of the following measures how efficiently a company utilizes its operating assets?

Lannister Corp. has a price earnings ratio of 17 and a dividend yield of 0.33%. Frey Corp. has a price earnings ratio of 14 and a dividend yield of 3%. Based on this information, it appears that investors think:

Most companies want a low inventory turnover ratio.

Wolfe Supply Co. sells hiking and other outdoor equipment. It also sells a few trail books and outdoor guides about the area. In their Income Statement, the revenue from the books and guides would probably be recorded as:

Inventory and prepaid expenses are NOT included in the computation of the:

The formula "net income divided by average Stockholders' Equity" yields:

Lions, Inc. has a price earnings ratio of 11 and a dividend yield of 2.2%. Stag, Inc. has a price earnings ratio of 16 and a dividend yield of 0.46%. Based on this information, it appears that investors think:

A company has $56,000 in cash; $16,000 in Accounts Receivable; $26,000 in short-term investments and $101,000 in merchandise inventory. The company also has $56,000 in current liabilities. The company's quick ratio is: (Round your final answer to two decimal places.)

What was the percentage of change in Accounts Receivable if the balance was $80,000 in 2015 and $59,000 in 2016? (Round your final answer to two decimal places, X.XX%.)

Salieri's Supply Company has net sales of $1,210,000, net income of $87,000, average current assets of $49,000, average fixed assets of $186,000, and average total assets of $235,000. Salieri's fixed asset turnover ratio is: (Round your final answer to two decimal places.)

The current ratio for a company with current assets of $79,000, quick assets of $43,000, total assets of $197,000 current liabilities of $64,000 and net sales of $95,000 would be: (Round your final answer to two decimal places.)

To determine the ability of a company to pay interest on its debt, you would calculate the:

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

Renoir, Inc. has net sales of $990,000, net income of $69,000, average current assets of $46,000, average fixed assets of $167,000, and average total assets of $207,000. Renoir, Inc.'s fixed asset turnover ratio is: (Round your final answer to two decimal places.)

Return on equity shows how well the business is investing its money, and if it using its assets efficiently.

Island Industries has a cost of goods sold of $1,900,000. The beginning and ending merchandise inventories are $130,000 and $122,000, respectively. Island Industries inventory turnover ratio is: (Round your final answer to two decimal places.)

For vertical analysis purposes, the base item on the Balance Sheet is:

Torres Company has $51,000 in cash; $8,000 in Accounts Receivable; $27,000 in short-term investments and $90,000 in merchandise inventory. The company also has $55,000 in current liabilities. The company's current ratio is: (Round your final answer to two decimal places.)

Kramerica Industries' receivables collection period is growing significantly faster than its competitors. This may be a red flag of an impending cash shortage.

Winters, Inc. has a cash balance of $78,000; short-term investments of $22,000; net receivables of $65,000; and inventory of $490,000. Current liabilities total $200,000. Winters' current ratio is: (Round your final answer to two decimal places.)