Exam 14: Financial Statement Analysis

The Bedford Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year. Inventory and prepaid expenses account for $30,000 of the current year's current assets. Average inventory for the current year is $36,250. Average net accounts receivable for the current year is $45,000. There are 35,000 shares of common stock outstanding. Total dividends paid during the current year were $17,000. The market price per share of common stock is $20. What is the current ratio for the current year?

Which of the following is the formula to compute times-interest-earned?

The McCumber Corporation data for the current year: With respect to net sales revenue, what would a horizontal analysis report?

Use the following information to do a horizontal analysis of Marcus Corporation's income statement for the current year and prior year: What is the dollar change in selling/general expenses?

The formula used in vertical analysis of the balance sheet is: (each balance sheet line item/total assets)= vertical %.

A company reported the following amounts of net income: Which of the following is the percentage change from Year 2 to Year 3?

The Bedford Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year. Inventory and prepaid expenses account for $30,000 of the current year's current assets. Average inventory for the current year is $36,250. Average net accounts receivable for the current year is $45,000. There are 35,000 shares of common stock outstanding. Total dividends paid during the current year were $17,000. The market price per share of common stock is $20. What is the inventory turnover for the current year?

In a horizontal analysis, the earlier period is the base period.

The ability of a company to sell inventory is measured by which of the following ratios?

The Bedford Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year. Inventory and prepaid expenses account for $30,000 of the current year's current assets. Average inventory for the current year is $36,250. Average net accounts receivable for the current year is $45,000. There are 35,000 shares of common stock outstanding. Total dividends paid during the current year were $17,000. The market price per share of common stock is $20. What is the rate of return on net sales for the current year?

In a horizontal analysis, the actual dollar change is a better analytical tool than knowing the percentage change.

Benchmarking is a valid analysis measure of performance.

The Hummel Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year. Inventory and prepaid expenses account for $28,000 of the current year's current assets. Average inventory for the current year is $12,000. Average net accounts receivable for the current year is $32,000. There are 40,000 shares of common stock outstanding. Total dividends paid during the current year were $60,000. The market price per share of common stock is $25. What is the company's times-interest-earned ratio for the current year?

Which of the following is the formula to compute inventory turnover?

The following information relates to Truman Unlimited for the past two years. The inventory turnover for the current year is

Taylor Company reported the following information for the current year: What would a vertical analysis report with respect to the relationship between current year net sales revenue and COGS?

Generally, using more than one year of data to analyze company performance is desirable.

The formula to compute the rate of return on net sales is

The formula for computing earnings per share of common stock is

Presented are the income statements of Conley and Woolf Publications companies for the current year: What should Woolf do to improve its performance to match or to exceed Conley's performance?